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"As the world waits to see where Amazon locates its second headquarters, one clue might lie in the rule of thumb of second-home buying: Pick a location that’s not too far from home. In the case of Amazon chief Jeff Bezos, that’s still a pretty wide field...."

 

https://www.wsj.com/articles/the-many-places-amazon-ceo-jeff-bezos-calls-home-1507204462?mg=prod/accounts-wsj

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  • 3 weeks later...

It's an interesting question, I like that "Pittsburg" is on the list, but Pittsburgh, the city in Pennsylvania isn't.  Is this Pittsburg Kansas?  I kid..we didn't have an "h" for a few years in the 1800s, but have had one since.

 

What makes a region desirable? Everyone can claim good schools.  I mean there are good schools everywhere, it's almost as if they're evenly distributed with our population..

 

I'm not sure it's a good thing to have Amazon.  We have a few tech companies, Google, Apple, Uber etc and it's done some good things, but also put pressure on the market.  Google has 450 employees here, I'm sure it's dwarfed by whatever's in NYC or Boston or whatever top tier cities there are, but they pay CA prices here.  There is a Googler down our street.  They overpaid for their house, overpay for everything and are trying to sell their house at a wildly inflated price.  They are price insensitive.  They purchased a second house and are dumping money into it like mad.  The thing is making $175k here is more than what most mid level execs make at generi-corps and more than what most business owners make.  Yet that's a fairly entry level salary.

 

We have already had a boom, the O&G boom, and it'll be back once prices tick up again.  Booms seem fun, until you're paying boom prices.  Land went from $1500/acre in the country to $8,000/acre because suddenly everyone thought they were living on a gold mine.  Rental prices increased, construction companies stopped caring about anything but O&G, it was madness.  Even hotels.  O&G guys were paying $120/night for dumps, so mid-tier places realized they could charge $150-200/night at a Fairfield Inn deep in the burbs and people would be forced to pay.

 

Now compound this with 50,000 new jobs.  The price pressure would be intense.  Is that good?  I don't know.  I know someone second-hand who is moving from here to work for Amazon in NYC.  He said the price difference for a house here to the burbs in NJ isn't that much.  It's depressing to me to realize that I'm on the verge of living in a HCOL area.  With Amazon and a few other tech companies who knows, this could be just as bad at NJ in terms of price, not something I'm excited about.

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Case in point: https://www.bloomberg.com/news/articles/2014-08-21/pittsburghs-startups-blame-google-for-stealing-tech-talent

 

I know the Birchmere guys, and Google is draining talent.  NoWait was a huge hit for them.

 

Another drain is Uber.  They've taken hordes of PhD's from CMU and the robotics lab.  I have mixed feelings on this.  The robotics lab was doing some ground breaking stuff that's been put on ice due to Uber's brain drain.

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It's an interesting question, I like that "Pittsburg" is on the list, but Pittsburgh, the city in Pennsylvania isn't.  Is this Pittsburg Kansas?  I kid..we didn't have an "h" for a few years in the 1800s, but have had one since.

 

What makes a region desirable? Everyone can claim good schools.  I mean there are good schools everywhere, it's almost as if they're evenly distributed with our population..

 

I'm not sure it's a good thing to have Amazon.  We have a few tech companies, Google, Apple, Uber etc and it's done some good things, but also put pressure on the market.  Google has 450 employees here, I'm sure it's dwarfed by whatever's in NYC or Boston or whatever top tier cities there are, but they pay CA prices here.  There is a Googler down our street.  They overpaid for their house, overpay for everything and are trying to sell their house at a wildly inflated price.  They are price insensitive.  They purchased a second house and are dumping money into it like mad.  The thing is making $175k here is more than what most mid level execs make at generi-corps and more than what most business owners make.  Yet that's a fairly entry level salary.

 

We have already had a boom, the O&G boom, and it'll be back once prices tick up again.  Booms seem fun, until you're paying boom prices.  Land went from $1500/acre in the country to $8,000/acre because suddenly everyone thought they were living on a gold mine.  Rental prices increased, construction companies stopped caring about anything but O&G, it was madness.  Even hotels.  O&G guys were paying $120/night for dumps, so mid-tier places realized they could charge $150-200/night at a Fairfield Inn deep in the burbs and people would be forced to pay.

 

Now compound this with 50,000 new jobs.  The price pressure would be intense.  Is that good?  I don't know.  I know someone second-hand who is moving from here to work for Amazon in NYC.  He said the price difference for a house here to the burbs in NJ isn't that much.  It's depressing to me to realize that I'm on the verge of living in a HCOL area.  With Amazon and a few other tech companies who knows, this could be just as bad at NJ in terms of price, not something I'm excited about.

 

I guess the only way to hedge this is to own some real assets?

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It's an interesting question, I like that "Pittsburg" is on the list, but Pittsburgh, the city in Pennsylvania isn't.  Is this Pittsburg Kansas?  I kid..we didn't have an "h" for a few years in the 1800s, but have had one since.

 

What makes a region desirable? Everyone can claim good schools.  I mean there are good schools everywhere, it's almost as if they're evenly distributed with our population..

 

I'm not sure it's a good thing to have Amazon.  We have a few tech companies, Google, Apple, Uber etc and it's done some good things, but also put pressure on the market.  Google has 450 employees here, I'm sure it's dwarfed by whatever's in NYC or Boston or whatever top tier cities there are, but they pay CA prices here.  There is a Googler down our street.  They overpaid for their house, overpay for everything and are trying to sell their house at a wildly inflated price.  They are price insensitive.  They purchased a second house and are dumping money into it like mad.  The thing is making $175k here is more than what most mid level execs make at generi-corps and more than what most business owners make.  Yet that's a fairly entry level salary.

 

We have already had a boom, the O&G boom, and it'll be back once prices tick up again.  Booms seem fun, until you're paying boom prices.  Land went from $1500/acre in the country to $8,000/acre because suddenly everyone thought they were living on a gold mine.  Rental prices increased, construction companies stopped caring about anything but O&G, it was madness.  Even hotels.  O&G guys were paying $120/night for dumps, so mid-tier places realized they could charge $150-200/night at a Fairfield Inn deep in the burbs and people would be forced to pay.

 

Now compound this with 50,000 new jobs.  The price pressure would be intense.  Is that good?  I don't know.  I know someone second-hand who is moving from here to work for Amazon in NYC.  He said the price difference for a house here to the burbs in NJ isn't that much.  It's depressing to me to realize that I'm on the verge of living in a HCOL area.  With Amazon and a few other tech companies who knows, this could be just as bad at NJ in terms of price, not something I'm excited about.

 

I guess the only way to hedge this is to own some real assets?

 

1. Prebuy RE once announced

2. ...

3. Profit?

 

8)

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It's an interesting question, I like that "Pittsburg" is on the list, but Pittsburgh, the city in Pennsylvania isn't.  Is this Pittsburg Kansas?  I kid..we didn't have an "h" for a few years in the 1800s, but have had one since.

 

What makes a region desirable? Everyone can claim good schools.  I mean there are good schools everywhere, it's almost as if they're evenly distributed with our population..

 

I'm not sure it's a good thing to have Amazon.  We have a few tech companies, Google, Apple, Uber etc and it's done some good things, but also put pressure on the market.  Google has 450 employees here, I'm sure it's dwarfed by whatever's in NYC or Boston or whatever top tier cities there are, but they pay CA prices here.  There is a Googler down our street.  They overpaid for their house, overpay for everything and are trying to sell their house at a wildly inflated price.  They are price insensitive.  They purchased a second house and are dumping money into it like mad.  The thing is making $175k here is more than what most mid level execs make at generi-corps and more than what most business owners make.  Yet that's a fairly entry level salary.

 

We have already had a boom, the O&G boom, and it'll be back once prices tick up again.  Booms seem fun, until you're paying boom prices.  Land went from $1500/acre in the country to $8,000/acre because suddenly everyone thought they were living on a gold mine.  Rental prices increased, construction companies stopped caring about anything but O&G, it was madness.  Even hotels.  O&G guys were paying $120/night for dumps, so mid-tier places realized they could charge $150-200/night at a Fairfield Inn deep in the burbs and people would be forced to pay.

 

Now compound this with 50,000 new jobs.  The price pressure would be intense.  Is that good?  I don't know.  I know someone second-hand who is moving from here to work for Amazon in NYC.  He said the price difference for a house here to the burbs in NJ isn't that much.  It's depressing to me to realize that I'm on the verge of living in a HCOL area.  With Amazon and a few other tech companies who knows, this could be just as bad at NJ in terms of price, not something I'm excited about.

 

I guess the only way to hedge this is to own some real assets?

 

1. Prebuy RE once announced

2. ...

3. Profit?

 

8)

 

For the real estate folks out there. How would you play Amazon's decision this once it is announced? (If it's NYC or Boston, i.e. a large expensive market, really nothing to be done, but a smaller market, like Austin or Indianapolis, there could be some interesting opportunities.

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If you wanted to speculate on real estate in cities where they may open their 2nd HQ...may I suggest simply getting options on real estate in those areas.  Short term options would be OK.  I think they are making the decision in January?

 

Or maybe put offers on real estate with a long closing period?

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  • 3 weeks later...

If you wanted to speculate on real estate in cities where they may open their 2nd HQ...may I suggest simply getting options on real estate in those areas.  Short term options would be OK.  I think they are making the decision in January?

 

Or maybe put offers on real estate with a long closing period?

 

I think you will have time.  No city will be able to negotiate without it leaking.  From that I assume Amazon will negotiate with multiple cities at once.

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  • 2 months later...

https://www.businesswire.com/news/home/20180118005771/en/Amazon-Announces-Candidates-HQ2

 

Columbus, OH

 

- Dallas, TX

 

- Denver, CO

 

- Indianapolis, IN

 

- Los Angeles, CA

 

- Miami, FL

 

- Montgomery County, MD

 

- Nashville, TN

 

- Newark, NJ

 

- New York City, NY

 

- Northern Virginia, VA

 

- Philadelphia, PA

 

- Pittsburgh, PA

 

- Raleigh, NC

 

- Toronto, ON

 

- Washington D.C.

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https://www.businesswire.com/news/home/20180118005771/en/Amazon-Announces-Candidates-HQ2

 

Columbus, OH

 

- Dallas, TX

 

- Denver, CO

 

- Indianapolis, IN

 

- Los Angeles, CA

 

- Miami, FL

 

- Montgomery County, MD

 

- Nashville, TN

 

- Newark, NJ

 

- New York City, NY

 

- Northern Virginia, VA

 

- Philadelphia, PA

 

- Pittsburgh, PA

 

- Raleigh, NC

 

- Toronto, ON

 

- Washington D.C.

 

You only listed 16 out of the 20.  You forgot:

 

- Atlanta, GA

 

- Austin, TX

 

- Boston, MA

 

- Chicago, IL

 

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This is a hunch.  I think that Amazon wind up in the DC Metro area as 3 of the 20 locations are on this final 20 list.  It's DC, Montgomery County, MD and Northern VA.  If you put these locations on the map, it is clear that they are all adjacent to each other.  Bezos also owns the Washington Post.  DC is the political center as there are more chatter now that Amazon may face anti-trust or break up risk.  Just seem like it makes sense.  There are a lot of locations in NV and Montgomery that has vacancy issues because the shift is to DC.  Amazon can probably take 5mm sqft of space without any issue. 

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This is a hunch.  I think that Amazon wind up in the DC Metro area as 3 of the 20 locations are on this final 20 list.  It's DC, Montgomery County, MD and Northern VA.  If you put these locations on the map, it is clear that they are all adjacent to each other.  Bezos also owns the Washington Post.  DC is the political center as there are more chatter now that Amazon may face anti-trust or break up risk.  Just seem like it makes sense.  There are a lot of locations in NV and Montgomery that has vacancy issues because the shift is to DC.  Amazon can probably take 5mm sqft of space without any issue.

 

Buy JBGS?

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This is probably the most welcome, dumbest corporate decision in history. A 2nd corporate HQ... Really?

 

I know plenty of companies who have multiple research centers but, could you please name one U.S. company that has two HQ in the U.S.?

 

Cardboard

 

What happens if one HQ decides one thing, and the other decides something else?

 

Will the AMZN empire split in two?

 

Will there be an Eastern AMZN and a Western AMZN? 

 

What happens if one of them is overrun?

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This is probably the most welcome, dumbest corporate decision in history. A 2nd corporate HQ... Really?

 

I know plenty of companies who have multiple research centers but, could you please name one U.S. company that has two HQ in the U.S.?

 

Cardboard

 

What happens if one HQ decides one thing, and the other decides something else?

 

Will the AMZN empire split in two?

 

Will there be an Eastern AMZN and a Western AMZN? 

 

What happens if one of them is overrun?

 

There's still a commander in chief over the entire company regardless of how many "HQ's" there are.

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Columbus getting it would be awesome.  They also have a decent size presence near Cincinnati. I do wonder if the HQ2 is coming in to play for a possible proactive response to regulations.

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This is probably the most welcome, dumbest corporate decision in history. A 2nd corporate HQ... Really?

 

I know plenty of companies who have multiple research centers but, could you please name one U.S. company that has two HQ in the U.S.?

 

Cardboard

 

What happens if one HQ decides one thing, and the other decides something else?

 

Will the AMZN empire split in two?

 

Will there be an Eastern AMZN and a Western AMZN? 

 

What happens if one of them is overrun?

 

I do wonder if they ever consider splitting retail and AWS.

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Today’s WSJ analysis puts Dallas at the top and DC, Montgomery county/MD and Northern Virginia right after. Given that 3 of the top 4 essentially form the DMV region, I wonder if folks here have looked  at ways to play this - perhaps, stock options in local housing/infra/real estate developers?

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