Amazon threatens to back off Seattle growth, but it wouldn’t be easy to leave
The company, which has more than 45,000 employees in
Based on average office rents in the greater downtown area, Amazon's office rent bill is likely north of
There's little to suggest Amazon is putting such plans into action yet. In the month since Amazon first suggested it would consider slowing its growth in
"They have a lot invested," said
When the
But an analysis of Amazon's footprint, based on conversations with real-estate industry sources, technology executives and corporate recruiters, highlight the challenges the giant retailer would face if it opted to scale back. While Amazon has options, including subleasing space and shifting new job openings elsewhere, they could be costly to implement in the short term.
Amazon has about 6 million square feet of leased office space now -- roughly 60 percent of its total footprint here -- with plans for more, including more than 1 million square feet worth of future leases that it has already signed.
The company doesn't disclose its office-lease terms, but most significant office leases in
That means Amazon would have to sublease its space if its plans change, and the company would face uncertain demand.
Starbucks,
In reaction to the head tax, Amazon floated the idea of subleasing space at the future
The 722,000 square feet in that project represents more Class A office space than any company in
Unless a huge out-of-town company moves in, Amazon would have to chop the building into several subleases and hope to piece together enough tenants to fill the building, Hatcher said.
The stakes would be high: Based on office rents for other new skyscrapers that have opened recently, Amazon's bill for
And then there's the other 3.6 million square feet of office space that Amazon owns, which includes portions of a six-block stretch of
Amazon could sell some of that space. But the sight of Amazon even trying to sell would likely make the land less valuable as it raised questions about the durability of the local technology boom the company helped start.
"That's a pretty daunting task, and if they did go down that road, it would really be a long-term process," said local developer
Amazon declined to comment on its plans.
In good shape to grow
Easier than uprooting its home base, real-estate industry sources and corporate recruiters say, would be shifting more of the company's prodigious hiring outside of
Amazon is already in better shape than most companies to grow elsewhere, after laying plans for a second headquarters in another still-undetermined city, and setting up significant outposts in cities across the continent. The company in the last year has announced real-estate deals that gave it space to tack on 10,000 workers in its network of North American satellite offices. The 17 largest of those already hold a combined 17,500 people.
Next year, a new option opens up, when Amazon has said it will place the first employees in its second headquarters campus.
"That flexibility, to them, is important," said
Amazon has said little about how quickly it aims to ramp up in whichever of the 20 finalist regions it plants HQ2, a project the company says will eventually host up to 50,000 people.
The company's request for proposals asked for 500,000 square feet of office space at the outset, enough space for about 2,500 workers.
Some HQ2 hopefuls believe Amazon will move faster.
People who have talked with Amazon executives say the company could grow more quickly than that in its first years in HQ2, by making use of short-term leases or coworking spaces, among other options.
Amazon said it may give executives and workers alike the option to move to the new headquarters after it opens.
"There is certainly a large percentage of [their workforce] who have moved here in the last five years," said a recruiter who works with the company. "Folks who have already moved once for Amazon, why wouldn't they move again?"
It's unclear whether the company would try to uproot entire teams and set them in a new city, which would risk departures by employees unwilling to move.
Such a move would likely be expensive.
Pace of expansion
In the long term, Amazon has more flexibility to let its presence in
Plans announced before the head-tax fight would give the company an estimated 14 million square feet in
An executive at UDR, a real-estate company that owns about 3,000 apartment units in the
Amazon's hunger for employees has outweighed recent doubts about its ties to the city, though.
The last time people were worried about Amazon pulling away from its hometown was in September, when it announced plans for HQ2. Yet its pace of expansion in
Amazon recruiters are frantically trying to fill that space with new hires. The company was seeking about 5,800 new employees in
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