A major real-estate fund is making a $10 million bet that Amazon will choose the Washington, DC area for its second headquarters

pulse

April 18, 2018 4:12 PM

Third Avenue Real Estate Fund is investing in a redevelopment in Northern Virginia outside Washington,DC, where Amazon could plant its second headquarters.

New York-based Third Avenue Real Estate Fund has purchased $10 million in shares in JBG Smith, a Maryland-based real-estate investment trust (REIT).
Third Ave reportedly told investors in a letter that the REIT's shares will "likely be worth a lot more than our current estimates" if
Evidence is piling up that the tech giant will pick Northern Virginia as the location of its new $5 billion campus.

Out of the 20 North American cities Amazon shortlisted for the site of its second headquarters, three finalists are near the US capital.

A major real-estate fund is betting that the tech giant will pick a site in Northern Virginia, specifically an Arlington neighborhood called Crystal City. According to Bloomberg,

In January, Amazon announced that it would build a $5 billion headquarters, dubbed HQ2, in a mystery North American city. The project promises 50,000 jobs over the next two decades, and many of the finalist cities are offering large economic incentives to the company to land it.

There is now mounting evidence that Northern Virginia is a top contender. As BI's Hayley Peterson previously reported,

Known as Data Center Alley, the area features a high concentration of data centers, including ones owned by Amazon Web Services. Approximately 70% of the world's internet traffic flows through Data Center Alley, and a big share of that passes through Amazon's centers.

By constructing HQ2 in Northern Virginia, Amazon could tap into its data-center network, bringing more efficiency to the internet connection at the headquarters. Plus, it would be a stone's throw from CEO Jeff Bezos' new $23 million mansion, also near DC.

Third Avenue certainly seems optimistic.

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