Bryan Copley remembers “the day that the last single-family residence in South Lake Union was bulldozed.”
The CityBldr CEO has lived in the same Seattle neighborhood Amazon calls home for about four years. He has watched South Lake Union transform to keep pace with Amazon’s rapid growth, a metamorphosis that is far from complete. “I can see 13 cranes from my deck,” says Copley.
Two or three years ago, Copley was walking down Republican Street when he witnessed the razing of a house. He hasn’t seen a single-family home in the neighborhood since.
“We’ve seen Seattle change and we’ve seen a lot of people not prepared for what happens when Amazon moves into their city,” Copley said.
But the next city Amazon moves into has the incredible advantage of knowing the company is coming. CityBldr wants to show property owners in the neighborhood Amazon chooses for its second headquarters just what they can expect when the e-commerce giant comes to town.
Sometime in the next six months, Amazon is scheduled to announce the winning city in its second headquarters competition. When that happens, CityBldr plans to immediately start speculating on real estate in that city and building a permanent, 12-person team there.
CityBldr is a Seattle startup, with offices just a few blocks from Amazon’s current headquarters. The company uses software to identify under-utilized properties. For example, CityBldr finds clusters of single-family homes in neighborhoods zoned for multi-family use that could be converted into apartments. In June, CityBldr announced it would start purchasing some of the properties it identifies directly and assembling them to sell for a larger return than if they were sold individually.
CityBldr is currently raising a $100 million property investment fund to cover the costs of properties in Seattle, Los Angeles (the company’s second market), and soon, the city that wins HQ2. That’s a big jump from the $2.9 million CityBldr has raised to date. But purchasing properties in not one but three high-demand markets is a capital-intensive business.
“We won’t be competing with Amazon for the properties they’re going after,” Copley said. “We’ll be looking for properties that are multi-family zoned but are not currently being used for multi-family housing. In whichever market they go into, Amazon will create a massive demand for housing and just like in South Lake Union and the areas around South Lake Union, people will be looking for homes close to work.”
In addition to looking for units to buy, CityBldr will release a list of the 100 properties Amazon is most likely to purchase, based on predictions from the company’s software.
CityBldr doesn’t always purchase properties its software finds outright. Historically, the company has acted as a real estate broker in partnership with established companies, like JLL. In many cases, CityBldr will connect with property owners in the HQ2 city to show them how much their land is worth and help them sell it.
Of the 20 cities in the running for Amazon HQ2, 19 are located in the U.S. If Amazon selects one of those cities it will be relatively simple for CityBldr to open an office there, as the company did earlier this year when it launched in Los Angeles. Copley says CityBldr is prepared should Toronto win. It will just require more paperwork to expand across the border. Toronto is actually the city Copley thinks is most likely to land HQ2.
Top 5 picks for #HQ2
— Bryan Copley (@rybanc) October 16, 2017
“We think this will make people more prepared,” Copley said. “It’s also our goal to create more transparency around real estate, especially in commercial real estate, and that just hasn’t existed in the past. We think this is a good first step.”
CityBldr’s plan to make HQ2 its third market without even knowing which city will win shows just how big an impact Amazon can have on a community. Whichever city is selected will undoubtedly see its economy, startup ecosystem, and housing market transform.
“It’s the economic stimulus that Amazon is providing that will make that city a place to do business,” Copley said. “If it’s already an exciting place to do business, double that.”