Amazon to buy its Seattle HQ from Paul Allen for over $1bn
Colossal etailer Amazon is going to buy its corporate headquarters in Seattle for $1.16bn, according to a company filing. The internet giant told the Securities and Exchange Commission that it's planning to snap up the complex of 11 buildings, around 1.8m square feet of office space, by the end of this year. The property is …
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Just three stars - the air conditioning is very hit and miss, and the elevators seems to break down every week. Good coffee though, which is worth an extra star all on its own.
All in all an acceptable space, but a bit disappointing compared to others in the series.
Amazon will be forking out... more than double the average rate... in the city
That suggests to me there's a tax-arbitrage in the deal somewhere. With Amazon supposedly paying considerably "over the odds" for this real estate, I suspect the IRS is getting the shaft. With no mercy.
Re: Amazon will be forking out... more than double the average rate... in the city
Or very simply had a lot invested in furnishings, infrastructure, etc. and figured that it would not be worth investing it again or paying to have it moved.
Just the start
Wait until the Amazonians see the "customers who bought office blocks also bought ... " list and start getting spammed daily with emails telling them about all the other office blocks they could buy, too.
Re: Just the start
Amazon.co.uk Trade-In Store
Did you know you can trade in your old buildings for an Amazon.co.uk Gift Card to spend on the things you want?
Amazon.co.uk amazon-offers@amazon.co.uk via bounces.amazon.com
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"Sounds like Amazon are making a lot of money."
or they are just good at giving that impression
Why shouldn't Amazon be making a lot of money? As opposed to some other companies in the "tech" sector I could mention they actually have products for sale that they make profit on and services they provide that people are willing to pay for.
Depends
How much does it cost to rent the site, buying their offices might be a better investment at the moment than anything else they could buy. Their return, is not paying any rent, against the buy and maintain costs.
Oh god I really am catching Solutions Architecture, can I go back to being a z80 programmer please 100 million washing machines can't be wrong.
"Most expensive purchase anywhere in the US of a single office property"
Hm? I seem to recall Google bought offices in NY for about twice that…
Good deal
So, after 3 years Amazon will be saving money compared to the average.
Assuming they have a better than average deal right now make that 5 years.
If you know your going to rent in the same space for 5+ years and you have the cash this deal makes sense for Amazon.
Also the sellers maybe fearing Amazon may move if they do not sell and then they may not get all of that Land leased. So, why take the risk? Sell up and diversify your holders into smaller more rent able plots with greater returns and especially as property prices have fallen now is the time to do this if this is your market.
Good deal for both.
Shareholders question value
Why pay twice the going rate? Color me suspicious.
Re: Shareholders question value
Another post mentioned a couple of reasons to pay a premium. First off, there would be the cost of relocating 11 million square feet of office to a new location. Add in the costs for renovating the new buildings with offices, electrical points, phones, internet cables, a server installation, etc, ad nausem. If they moved, it would be mandatory to hire a heard of interior designers to choose the colors and fabric of the new cubicles. If they didn't find suitable space close by, and it's likely they wouldn't, there would have to be a large budget for relocating personnel.
I am sure that Amazon's finance people ran the figures and it was cheaper to stay put. Paul Allen's people probably also ran some numbers and figured they had Amazon by the "short and curlies" and could get twice the going rate on the buildings by telling Amazon that they were going to be selling the properties. Shrewd move by Vulcan if that was the case. I'll have to remember the tactic. <eg>
Re: Shareholders question value
Probably for the land, the area between Westlake Center and SLU is relatively cheap now, but is expected to climb in value. They have also purchased 3 sections of land nearby and are planning on a complex of 3 35-ish floor towers, they could be planning on knocking over the buildings they are buying and using the land for future expansion.
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