Big News in Commercial Real Estate: Amazon and Google Duke it Out in NYC

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When Amazon speaks, people listen. They just spoke this week about being in the final steps of confirming their new location and it was HUGE news. News so big, it couldn’t be contained in just one city. Amazon made public that they plan to split their 50,000 worker headquarter site into two, according to the New York Times. The idea here is to divide the city-wide impact of up to 50,000 new people across two different infrastructures. So, what does the future hold for New York and Amazon? As Google also eyes a huge expansion in the city, the future is more uncertain than ever.

By The Numbers

While 50,000 new people may seem like a lot, it’s barely a bump in the road of NYC’s actual population of 8.6 million people. That’s only a 0.58% increase in population assuming that every person they hire did not live in NYC to begin with and that is highly unlikely since they are choosing the city due to its voluminous job market to begin with.

Let’s compare that population growth to Boise, Idaho’s to put things in context. Boise has been experiencing a high influx of people moving here from out of state. According to worldpopulationreview.com, Boise has been growing at a rate of 1.66% and 1.44% in 2016 and 2017 respectively, which is as if Amazon dropped a headquarters that housed 140,000 people on NYC two years in a row. One has to wonder if there are any other reasons for their decision to split the new headquarters in half besides just lessening the burden to city infrastructure.

Google in The Mix

CNBC is reporting that Google allegedly plans to significantly expand its New York City presence and is nearing a deal to buy or lease a planned 1.3 million-square-foot office building at St. John's Terminal in Manhattan's West Village neighborhood. This could house a staff of around 9,000 additional employees.

They are also expanding their Chelsea Market property and adding a space at Pier 57. All told, they could be bringing an additional 15,000 new employees to the city which will coincide with their $2.4 billion dollar purchase of the Chelsea Market property earlier in 2018, according to Reuters. Seems like the tech giants are fleeing California for the east coast. Is this the start of a new Silicon Valley exodus or do Google and Amazon just want to achieve bi-coastal domination?

Other Cities in The Mix

The New York Times reports that there are other cities that are close to the final choice for the split HQ locations. They say that Amazon is closely considering Crystal City, Virginia which is just a stone’s throw outside of Washington D.C. and is a suburb of Arlington, Virginia. This seems like an odd choice seeing as how it’s only 250 miles outside of NYC and a 4 hour car ride from their other HQ location. It would seem to make more sense if the other location would be more geographically diverse in order to draw from an even larger pool of job talent. With the two headquarters within an afternoon’s drive, it would seem that they would be cannibalizing their own talent from one another.

If you really wanted to increase your talent pool diversity with a more full presence on the east coast, then a location in Charleston, South Carolina would be great. Or if you really want an interesting and historical city for your new HQ then New Orleans, Louisiana would be a bold choice. The other cities that have been in the running for top choices are Dallas, Texas and Newark, New Jersey. Both of which would make interesting choices as well.

While we don’t know what the future will hold for these cities just yet, this would be a perfect time to invest in property in and around the New York City area, just in case.