Seattle has done its fair share of hand-wringing in the months following Amazon’s announcement that it will establish a second corporate headquarters. With memories of Boeing’s departure lingering, speculation that the region’s top private employer might contract its presence in its hometown or send a message that Seattle is closed for business by searching for HQ2 swirled.
A leading investor and an economist threw water on those concerns, going so far as to say Amazon HQ2 could be good for Seattle’s economy, during an event at the Seattle Rotary this week.
I sat down at the event with Heather Redman, co-founder of venture capital firm Flying Fish Partners and the chair of the Seattle Metropolitan Chamber of Commerce, and Matthew Gardner, Windermere Real Estate chief economist, to talk Amazon HQ2. Watch the video below or continue reading to find out what they had to say when I asked whether Amazon’s search for a second headquarters could be a boon to Seattle.
Heather Redman: “I think diversity is always good. Diversity of employment and diversity of employers is good and having some elbow room for smaller companies to be able to hire, to be able to lease is great. I will say that Amazon has hugely benefited us in terms of the talent that it has attracted here. People who had never heard of Seattle, people from India, people from China, people from the East Coast who have never heard of Seattle — there are those people — coming here and saying, ‘Wow, I love it. I want to stay.’ Those people are now people that my portfolio companies can hire, which is good.
“The countervailing thing to this idea that Amazon is going to create some elbow room for us is that I think we’re about to experience a post-election boom. I think getting Jenny Durkan elected, which we at the Chamber worked very hard to do through our PAC, I think is a thing that the Bay Area, in particular, has been waiting for and probably some folks in China and some people in Japan and Korea and Europe, as well. I actually think we’re about to experience another growth spike because if you’re Facebook, if you’re Mercedes, if you’re Alibaba, you’re looking at Seattle. You’re saying, ‘I would love to grow my engineering team there’ or ‘I would love to start my engineering team there but I don’t know if Seattle’s crazy.’ I think that by electing Jenny, we were able to establish Seattle is not crazy and that will create a lot more movement here. I think we had a little bit of an artificial pause in our growth as we were looking at that election and we still have more tests to pass … but I do feel that we’re going to see a lot of pressure from non-Amazon tech companies or companies that want to be more tech over the next 12 to 18 months.”
Matthew Gardner: “On the commercial side, yeah, if they’re not sucking up every square foot that there is in the marketplace, that’s going to help other companies. It might cause not compression in rental rates but a slowdown in the increase in rental rates. That’s going to be a good thing.
On construction as well, everyone, they’re all building for Amazon and doing remarkably well. If that slows down then their costs escalation might slow down a bit. That may help other commercial developers. On the apartment side, rental rates have really gone parabolic over the last several years. If we see that slow down, I will not be unhappy about that whatsoever. So I think yes, if they’re not sucking everything out of Seattle on the commercial side or even the residential side that can actually be a positive rather than a negative.”