Property values could spike near Crystal City because of Amazon's HQ2
ARLINGTON, Va. (ABC7) —
The high rise, at 1851 South Bell Street in Crystal City, is quickly becoming a sight-seeing destination.
Some people stop and stare, others pull out their phones for a quick picture.
That’s because the cube-shaped building, partly covered by a colorful, bright tarp, might just be a new Amazon HQ2 headquarters.
At stake: 25,000 to 50,000 jobs, an up to $5 billion investment by the retail giant.
“I don’t think it’s hype, but I definitely think we’re the strongest contender,” said Mike Castle, a Defense Department employee.
Besides the Washington Post report naming the Bell Street location as one of two Crystal City buildings that would house HQ2, there are some other subtle signs that Amazon might be coming.
Arl Now reported that just days ago, a vacant lot along Eads Street owned by developer JBG Smith, was the scene of preparations for an event that included the use of a platform and a tent. The report also said, though, that both the platform and the tent have since mysteriously disappeared.
Outside, a cryptic message, painted on a white fence with the words, “Why not?”
All of which normally would have no significance, except it just so happens the Bell Street building is owned by JBG Smith.
“If Amazon is looking to have an opportunity to reach the halls of Congress, be able to lobby for their commercial rights, etc., then I think this is the best place to be, “ Castle said.
Both Amazon and JBG Smith are not commenting on reports of a potential HQ2 arrival in Crystal City.
But already, area real estate agents say they are being flooded with calls, from investors who want to buy homes for their own use or flip to sell.
“So the buzz is with everybody is in our industry,” agent Nick Mustamarhadi said. “The last 180 days we sold about 1,458 properties just in Alexandria because of this Amazon HQ2 coming into the area.”
Mustamarhadi believes most housing investors may end up renting properties before buying to see how the effects of an HQ2 arrival will shake out.
“They know if the Amazon employees come into this areas, they’ll ahead rent out, feel out the place for a year,” he said. “Just like some of my clients moving from California.”
But even as the DMV housing market heats up, experts acknowledge there will be a flip side: rents could go up and a potential housing shortage is on the horizon.
“In recent years, housing production, new construction hasn’t kept up with population growth,” said Marjorie Turner, senior vice president with the Urban Institute, a DC economic and social policy think tank. “Some rents may go up but again, the choices are in our hands right now. What kind of area the Washington area wants to be.”
A report by the institute says even before any HQ2 buzz, rents have been steadily climbing in the capital region.
Between 2011 and 2017, the report says, Loudoun County saw an 11 percent increase in rents.
In the District, about 8 percent during that period.
The report also cites Metropolitan Washington Area Council of Government statistics that show by 2025, the market will need 267,000 housing units if HQ2 moves to the area.
Right now, only 170,000 units are projected to be built.
But Turner said that can change.
“We’ve got a lot of forces putting pressure on prices and rents. We can tackle that pressure,” she said. “The region produced many more units a year back at the beginning of this century and can do it again.”
Turner says builders, developers, and other parties in the housing industry will need to do more “smart construction” including preserving already built real estate holdings.
Every building that’s preserved is one you don’t have to build, she points out.
“The business community is now in conversation with low income housing advocates and local government leaders with housing agencies,” Turner said. “The conversation about the possibility has gotten people talking about how to make this a region that’s both prosperous and inclusive.”
All this is food for thought for Castle, who says if the condition were right, he’d be willing to invest in some real estate should HQ2 settle in Crystal City.
“This whole area’s got the room for them. I think it would be a very good benefit to have them here,” he said. “If the price was right, if the property was right, the location, yes.”