Update: The Top US Cities With The Best Chance To Host Amazon’s HQ2
Amazon will be developing a 50,000-person HQ2 in North America. Cities everywhere started to express their interest in welcoming the new facilities.
Amazon confirmed last Thursday that it will be spending more than $5 billion to build another headquarters in North America to house as many as 50,000 employees. At the same time, the ecommerce giant plans to stay in its already iconic Seattle headquarters, with the new space “a full equal” to that, said founder and CEO, Jeffrey P. Bezos.
This announcement represents the latest step for Amazon, after the recent $13.7 billion takeover of Whole Foods Market. Cities interested in becoming the chosen location will have until October 19 to apply through a special website, and Amazon said it will make a final decision next year.
It seems as though every mayor in every city in America has expressed interest to host Amazon’s next headquarters. Recode has created a select list of cities with over a million people that have a chance of getting Amazon’s attention. They criteria for comparing these cities includes, tech talent, airport travel time, office prices, housing costs and population.
The company’s forecast is to hire up to 50,000 new full-time employees over the next 15 years, and they would make an average pay of more than $100,000 a year. What does the ecommerce giant want?
Amazon wants to be near a metropolitan area with more than a million people. This also helps to attract top technical talent. The location should be within 45 minutes of an international airport and have direct access to mass transit. Also, there must be room for expansion, as much as 8 million square feet in the next decade. This is about the same size as its current HQ in Seattle: 33 buildings, 23 restaurants and houses 40,000 employees.
Amazon is also looking and hoping for something else from its HQ2: tax breaks, grants and other incentives. A section of the proposal that outlines those says “the initial cost and the ongoing cost of doing business are critical decision drivers.”
Recode’s list looked at more than 20 cities in America. Regarding commercial real estate, Washington, D.C., is the most expensive. On average, it costs $595 dollars per square foot to buy office space in its central business district, according to 2016-present sales data from commercial real estate data firm Real Capital Analytics.” Boston ($550 per square foot) and Austin ($486 per square foot) are second and third on the list respectively.
On the other hand, there extreme cases such as Columbus, Ohio, where the average office price per square foot is $61. Milwaukee, Wisconsin is the second lowest -$100 per square foot. Regardless, Amazon’s downtown Seattle home ($604 per square foot for office space) remains the champion.
Of course, commercial real estate is only part of the big equation. Most tech companies, spend about 4 percent of their operating expenses between real estate rental and leases – 50 percent goes to payroll.