You have likely heard the news by now that “Amazon is coming!”
Depending upon who you read or listen to it is going to be the end, the beginning, or the need to go out and make rash real estate sales or investment decisions right now. Go buy bread and milk now!
I had the opportunity to hear an Amazon executive brief a local chamber of commerce and he put some things into perspective for us. In short – Amazon is already here. They have over 10,000 employees in Virginia including Whole Foods and their distribution center in Richmond. In the creation of their campus at National Landing (Crystal City) Amazon is heading to an area of Northern Virginia that had realized high profile office space vacancy since the departures of among others, the Navy Sea Systems Command (NavSea) and USAirways. The area will get a new anchor property owner, and a high profile one at that.
Through the establishment of HQ2 in Arlington, Amazon expects to add another 25,000 jobs in the next 10 years. If we factor in their 400 jobs expected in 2019, and the 1200 next year, we are looking at 2400 new jobs a year thereafter.
In the last 12 months, Virginia added 38,000 net new jobs, and the Washington DC area added 58,000 net new jobs. In the decade of 2000-2010, Northern Virginia grew by 400,000 people. Furthermore, the Greater Washington Board of Trade claims that if the Washington DC area was a country, it would have the 23rd largest economy … before Amazon HQ2. Kind of puts these numbers in perspective.
Now we already had an annual shortage of 25K houses in Northern Virginia, so we should expect Amazon will contribute to this. That could mean strong housing prices, but less affordability in some of the more desirable areas. Regardless, I would expect the prices will calibrate with demand and supply. Positive news is Amazon has brought a lot of attention to our area, and through this will have an impact on infrastructure. We should see some increased non-basic employment in Education, Retail, Medical, and Services sectors.
Amazon is going to be a good steady boost to our real estate market and economy in the Washington DC Local Economic Area over the next decade. I would expect them to be a portion of our overall continued growth in an already strong region.Ed Martin, CPRES, MBA