The media is reporting that Amazon has made a big investment in Seattle office space. The interesting real estate economics question here focuses on Amazon as a "big player". As it expands in specific locations in Seattle, how much gentrification does this cause in a close vicinity of its main buildings? If Amazon is aware that its actions have this effect, shouldn't it be buying more property nearby where it plans to expand? Its expansion plans are private information that only that companies knows before it executes its strategy.
Why would Amazon have this local impact? As it employs more executives, these well paid, sophisiticated men and women will seek out upscale food places (Amazon doesn't sell food?) and this will make the local area nicer. Intermediate firms who seek to do business with Amazon will locate close by and a snow ball effect will emerge offering returns to nearby commercial real estate investors and owners of multi-family apartment buildings who upgrade their buildings to rent to the "Amazon Set".
Recent Comments