Amazon.com announced their plans to occupy two more South Lake Union office towers. Buzz about Amazon’s weight in Seattle’s commercial real estate market has some long-time Seattleites equal parts excited and uneasy. One Seattle real estate observer remarked, “Amazon’s appetite for space is both impressive and scary at the same time. They have single-handedly driven the expansion of the Seattle office market and could single-handedly drive it back down.” Will Amazon sink like Washington Mutual in 2008, or swim?
The current 10.7 percent vacancy rate for office buildings is steadily declining, as Amazon’s employment is steadily increasing. With an estimated 25,000 current Seattle employees, Amazon.com is set to occupy about 25 percent of the premium office space (that’s about 10 million square feet) downtown, according to an analysis done by The Seattle Times.
Seattle’s traffic and infrastructure needs much improvement in order to accommodate Amazon’s expansion. Tack on housing for 20,000-30,000 new employees, and our fair city has got a lot of work to do! Amazon real estate director John Schoettler told a group of real estate professionals last fall that developers would need to build 30 new residential buildings, with at least 200 units each–just to house its continuously growing number of employees.
Although one would be hard-pressed to find a person who hasn’t shopped via Amazon, Speculation about the company’s failure to make a consistent profit is perhaps the most worrisome component in their vast expansion. Amazon is a giant. If it falls, Seattle is in trouble. But their $100 billion in revenue that is increasing at over 20 percent each year could secure Seattle’s enduring mark on the national investment scene.
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