Tech giants occupy nearly 600M-sf of US real estate
The sluggish commercial real estate market is getting a boost from tech giants Amazon and Facebook, which have emerged as some of the largest acquirers of real estate in recent years.
Five of the largest tech companies — Amazon, Facebook, Apple, Microsoft, and Google’s parent company, Alphabet — now collectively occupy about 589 million square feet of U.S. real estate, according to the Wall Street Journal, citing data from CoStar Group. That is more than five times the space the sector occupied a decade ago.
Although some of these companies, including Facebook and Microsoft, are implementing flexible work-from-home policies in the wake of the pandemic, the sector is still making big bets on office space, warehouses, and data centers. In 2020, the five tech firms have expanded their real-estate footprint by more than a quarter, marking the fastest rate in a decade.
These firms are now outpacing large REITs like Simon Property Group and Equity Residential when it comes to property holdings, according to the publication. Alphabet owned $39.9 billion in land and buildings as of September, according to filings with the Securities and Exchange Commission, up from $4 billion a decade ago. As of the end of 2019, Amazon owned $39.2 billion in real estate, up from slightly more than $1 billion in 2010.
Google’s first large real estate purchase came in 2010 when the company bought an office building in Manhattan’s Chelsea neighborhood for $1.8 billion. The company has since leased more office space in the area and bought another nearby building for $2.4 billion.
Tech companies generally buy properties rather than lease, since it allows the firms to have full control of the buildings.
But the companies’ emergence as landlords has drawn sharp criticism from anti-gentrification activists who say their presence has driven up the cost of living. Data bears that out: Home prices close to Google’s Chelsea campus and Amazon’s new HQ2 in Virginia have risen faster than in other areas, the Journal reported.
via: The Real Deal