Amazon’s plan to add 3,000 jobs in yet another Seaport office tower is a gift for more than the struggling Boston office sector.
Boston may have lost out on the race for the Seattle-based tech giant’s second headquarters in 2018, but Amazon continues to deliver plenty of consolation prizes to local developers. WS Development is already underway with one Amazon building slated to employ 2,000 in the Seaport, and an additional 3,000 employees are now planned for a second tower next door.
It is certainly a boost to office development at a time when uncertainty clouds what the future workplace looks like, but residential developers also have reason to rejoice.
“In terms of real estate, 5,000 jobs is 5,000 households,” said Timothy Warren, CEO of the Warren Group, a real estate analytics firm and publisher of Banker & Tradesman. “That’s a lot of units, and it has to come from somewhere.”
The combined Amazon job count in the neighboring office buildings is the latest in a decades-long transformation of the Seaport that has seen parking lots give way to office and lab tenants like Vertex Pharmaceuticals, the law firm Goodwin, and Boston Consulting Group. These firms’ high-paying jobs gave developers the motive to launch residential projects like the high-end 22 and 50 Liberty condo buildings and the Benjamin and Via apartment developments.
There’s plenty of reason to think Amazon could bring even further luxury housing developments, especially since it is pure job creation rather than the relocation of existing jobs from offices in the suburbs or elsewhere in the urban core.
“It’s a good sign and good driver for the housing market in the Seaport,” said Aaron Jodka, a managing director of research and client services at Colliers International. “This lease and expansion by Amazon is pure growth: 3,000 new jobs to the city of Boston. It’s different from some of the relocations we’ve seen over the last few years where companies have moved into the city and primarily moved jobs rather than expand.”
Stories are rampant that people are fleeing the city in favor of the suburbs and that office vacancy rates are soaring, but plenty of lab development and now Amazon’s expansion in the Seaport are enough to give the real estate community confidence in future housing demand for the urban core. There could even be a new post-pandemic marketing tag for these developments.
“This clearly favors the multifamily market, which had seen sharp short-term adverse impacts in 2020,” said Brendan Carroll, a research director at Cushman & Wakefield. “In fact, housing proximate to urban work settings enables what we’re now calling an ‘open-air commute,’ where workers don’t need to deal with either congested freeways or shared transit with other riders.”