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How To Leverage Amazon’s HQ2 For Residential Investing

18 Dec 2018

Amazon’s plans for the new headquarters in Crystal City provide a once-in-a-lifetime opportunity to flip homes and improve housing in the Arlington and Alexandria areas. According to The Washington Post, the new site, called National Landing, is bringing 25,000 new jobs that pay an average of $150,000 yearly salary. This is good news for investors since all these professionals are going to need somewhere to live that fits their lifestyle.

In addition to the jobs, the cities are pledging over $200 million in transportation improvements that will give the nearby neighborhoods an easier commute and attract residents from across the northern Virginia (NOVA) and Washington, D.C., area. Billion-dollar partnerships with local universities promote even more development, suggesting a new East Coast Silicon Valley that will grow for years to come.

Intimately knowing the areas where you lend is critical to decision making. As an investment lender, I am always tracking local development projects in an effort to offer better insight into the investment properties that our clients bring to us. My company has provided capital to D.C. metro area real estate investors since 2012, and major development projects have always driven major shifts in the local investing landscape, creating new hot neighborhoods and access to amenities. To see a development with the scope of the Crystal City HQ2 means that a new epicenter of opportunity is opening up for savvy, researched investors.

The most prepared property investors will seize this chance to expand their businesses and increase their profits. Check out the top areas for residential investments and why they might be the next hot markets.

Best For Multi-Unit And Duplex Flips: Crystal City

The area is made up of old high rises and abandoned offices, making it a perfect spot for upscale condo conversions and lofts that will cater to the sophisticated Amazon executives moving in. A quick Zillow search or a “Street View” in Google Maps shows that there are plenty of single-family homes and duplexes west of Fern Street in the historic Aurora Highlands neighborhood with access to a local Whole Foods and Costco. The quiet residential feel paired with access to amenities means the demand for renovated housing here will be high.

Why here? Crystal City has a lot going for it, including a network of underground tunnels that make the city walkable in any weather. According to Marisa M. Kashino of The Washingtonian, Amazon has purchased buildings off Fern Street between 12th Street S and 18th Street S between the Pentagon City and Crystal City Metro stations, and leased others directly across from Ronald Reagan National Airport. Also noteworthy is the planned pedestrian walkway to connect the headquarters to the airport directly. The easy access to work, living space and other amenities is sure to draw urban professionals and create a thriving nightlife to make the area into a new hotspot.

Best For Single-Family Home Flips: Del Ray

The region just south of National Landing along Route 1 is a single-family community with orderly blocks arranged in a grid and small-town charm. Del Ray is known for its Craftsman-style homes built in the 1930s, with mature trees and sidewalks out front. Just two blocks east of Mt. Vernon Avenue, Eugene Simpson Park boasts a playground, dog park and athletic fields. These will be the neighborhoods of choice for families wanting homes with yards to settle down in the suburbs.

Why here? The new Potomac Yard Metro station is slated to open in 2020, and workers with families will be drawn to the charming homes with an easy public transportation commute to National Landing. There are also several Capital Bikeshare stations dotted throughout the neighborhood along with the Metroway.

Best For Rentals: Virginia Tech’s Innovation Campus/Potomac Yards

Amazon’s Innovation Center partnership with Virginia Tech in northeast Alexandria/Potomac Yards will create a new campus for students to supplement the technical needs of an online giant like Amazon, and it stands to reason that these students and young professionals will need housing that fits their budget. In my investing experience, rental options are almost always the best option for this demographic, as many students have tight budgets and may leave the area after their studies are complete. Look for multifamily units and rental homes that can be renovated to suit graduate students, research assistants and post-millennials working for startups in Westover and Old Town West.

Why here? Accessible through Braddock Station and Route 1, this area hasn’t seen the same development and modernization as other parts of the city. According to the city’s website, the former railway yard has gained a history of redevelopment plans that never came to fruition. The hope is that the Innovation Center will change this area’s “failure to launch” stigma, with plenty of older properties to renovate.

Best Opportunity In Washington, D.C.: Bellevue And Congress Heights

National Landing is just a short distance to several Washington, D.C., neighborhoods. Bellevue, Congress Heights and Washington Highlands are beginning to see the effects of D.C.’s white-hot housing market, and there are still deals to be had in this section, which currently holds some of the city’s least expensive real estate. Plus, nearby are a new library and recreation center.

Why here? Its location south of D.C. gives it a perfect commute to the new Amazon buildings that will be going against traffic flow. Commuters will be heading west over I-695 and then south on 395 when everyone else is headed north to Capitol Hill.

The need for housing across Northern Virginia and into D.C. will be strong over the next decade. The offices won’t be fully staffed until 2030, meaning the changes will be gradual, and real estate investors can make changes as new variables come into play. Predicting new investment hot spots can be difficult, but the news of Amazon HQ2 has made it a no-brainer for those who can move fast enough to pick up properties before they begin to disappear.

Source: Forbes