Digital retail behemoth Amazon announced September 14 plans to hire 100,000 new employees across the United States and Canada. This come of the heels of the company’s recent announcement of the creation of 33,000 new technology and corporate jobs with an average salary of $150,000 annually.
A response to the nation’s embrace of social distancing, Amazon’s nationwide hiring push could also mean spikes in demand for new multifamily housing across the country as workers displaced by the pandemic find new employment.
Berkadia Research took a closer look at where those hiring surges are concentrated in order to anticipate how the hiring of thousands of new Amazon employees stands to positively impact the multifamily housing industry.
Metro-Level Multifamily Housing Insights
Rent Trends Favor Class B and C Housing In Chosen Metros – One of the most common themes among the cities where Amazon has chosen to hire thousands of new employees is a shrinking spread between the cost of Class A and B rental housing. A spike in Class A apartment deliveries coupled with renters seeking more affordable rental options—a trend exacerbated by COVID-19—has created upward pressure on rents in the Class B and C space.
Consider cities like Phoenix, Charlotte, Dallas, Louisville, and Detroit. The five metros represent over 16,000 of recently announced Amazon jobs, many of which are expected to pay starting wages of $15 dollars per hour. On average, effective rent for lower tier apartment units in these metros have increased 4.2% since August 2019. This provides just a glimpse of the potential opportunities for the multifamily industry as Amazon drives job growth by the tens of thousands across multiple metros.
Low-Income Multifamily Less Vulnerable Than Anticipated – One narrative that has persisted during the pandemic is that of potential fallout for the multifamily industry due to a wave of low-income workers losing their incomes and failing to pay their rents. While there has been some measured impact on rent payments, data collected by Middleburg Communities revealed that just 18.6% of those employed in the most vulnerable industries are multifamily renters. A larger percentage of those vulnerable to economic pressure are renters living in single family homes, townhomes, and mobile homes.
Amazon HQ Eyes Bellevue Expansion – The recent announcement of 10,000 new jobs in Bellevue, 10 miles east of Downtown Seattle, follows a February report that said Amazon was aiming to hire 15,000 new employees in Bellevue over the next several years. Amazon has multiple major office projects planned or underway in the area:
- The 420-story 555 Tower and West Main, a set of three 16-to-17-story towers; the two office projects that make up a combined 2 million square feet. Both projects are expected to be completed by 2023.
- The Bellevue 600 Project, originally conceived as a 43-story, 1-million-square foot office tower scheduled for completion in 2025, has since been expanded. The project will now include a second 27-story, 550,000-square-foot office tower.
New Lakeside Development in Phoenix – Over 500 of the 33,000 tech and corporate jobs will be located at a recently expanded technology hub near Tempe Town Lake in Phoenix, Arizona. The company has leased 90,000 square feet at an under-construction, 1.6-million-square-feet office space that will enhance the Hayden Ferry Lakeside development.
Amazon Revitalizes Detroit’s Old State Fairgrounds – Amazon will open a $400 million, 4-million-square-foot distribution center at the Old State Fairgrounds in Detroit that will employ another 1,200 employees in 2022. Over 100 of the 33,000 recently announced tech and corporate jobs will be located in downtown Detroit.
Tech Expansion Continues in Nashville – Nashville will be home to over 500 of the recently announced high-paying tech and corporate jobs. The company’s local hiring push coincides with the opening of a new 1-million-square-foot downtown office space.
Have more questions about the latest apartment rent growth trends in Amazon hiring hubs? Reach out to one of our trusted investment sales or mortgage banking advisors in your area or check out one of our latest research reports for metro-level analysis of the biggest apartment markets nationwide.