"Now that the dust has settled and the stock has bounced back, they could certainly plan a more efficient campus," said Kip Spencer, co-owner of Officespace.com
At the height of the region’s high-tech boom, Amazon.com’s decision to move its headquarters to the historic Pacific Medical Center tower, perched on the north end of Beacon Hill, was as much a statement about the company’s ambitions as it was a reflection of just how hard good office space was to come by in Seattle.
But six years later, the iconic Internet retailer is thinking about moving.
During the past few months, Amazon has been quietly talking with developers and building owners around the region about the possibility of moving its headquarters, according to several sources familiar with the discussions.
Most Read Stories
- Seattle hits record high for income inequality, now rivals San Francisco
- Anthony Bourdain brought 'Parts Unknown' to Seattle — here's where he ate
- A Washington county that went for Trump is shaken as immigrant neighbors start disappearing VIEW
- Seattle’s crazy restaurant boom | PNW Magazine VIEW
- Seattle-Dublin nonstop flights to begin in May 2018
Sources said the company would need as much as 1 million square feet, or about the size of a 50-story skyscraper. That could be spread out among several campus-style buildings if the company decided to relocate outside the downtown core.
An Amazon spokeswoman declined to talk about the company’s real-estate plans yesterday. And any move still would be years away.
But word of the company’s search has electrified the city’s real-estate community.
“If it’s true, it’s a huge story,” said Rob Hollister, an executive with the real-estate firm Hines, which developed Seattle’s IDX Tower. “Deals [that big] don’t come around very often.”
The company was founded in 1994 by Jeff Bezos, still the chief executive. It launched its Web site in 1995 and went public May 15, 1997.
About 9,000 full- and part-time employees work for the company worldwide. It has operations in France, Germany, Japan and the United Kingdom. The number of employees in Seattle was not available.
In 2004, the company brought in $6.9 billion in revenue and made $588.5 million profit.
In 1999, Amazon signed a 10-year lease with Seattle developer Wright Runstad for 12 floors in the landmark 1930s-era building overlooking downtown Seattle. While four years remain on the agreement, real-estate experts said the company would need that much time to design and develop a project if it decided to move.
Amazon has corporate employees spread out among two other buildings south of downtown. The company is looking at whether it would make sense to bring them together under one roof, sources said, and whether it needs room to expand.
Since the company laid off 1,300 workers in 2001, its staff has been growing along with its revenue. It has recently focused on recruiting programmers and computer scientists, and in the final three months of last year added 200 employees companywide.
There is no shortage of developers around Seattle and the Eastside with the land and expertise to accommodate whatever Amazon wants, said Kip Spencer, co-owner of the online real-estate service Officespace.com.
A deal that large could revive several major projects that have been gathering dust since the dot-com bust and recession tanked Seattle’s superheated office market. Seattle’s South Lake Union, Denny Triangle or Pioneer Square areas, for example, could accommodate that much space.
For large companies, a headquarters building is as much about creating an image as it is about creating the right working environment. And Amazon wouldn’t be the only local titan to shake up the region’s landscape.
Despite financial troubles, Washington Mutual is building a 42-story tower next to the Seattle Art Museum. As employees move into the new building, the bank will dump a significant amount of office space on a market still struggling to recover from the downturn.
The Bill & Melinda Gates Foundation is negotiating to buy a 12-acre parking lot from Seattle Center for a campus that could eventually have 600,000 square feet of office space.
Insurance giant Safeco is deciding whether to consolidate its headquarters in Seattle or on the Eastside.
Amazon, if it decides to move, would be looking at a much different real-estate market than the one it faced in the late 1990s. It moved into the former hospital during an office crunch in Seattle and the region that sent new- and old-economy companies scrambling for space and led many to consider unconventional buildings for a swelling work force.
With its funky Art Deco exterior, high-profile location and views of downtown Seattle, the building seemed in many ways a perfect place for a company that was among the leaders of the booming dot-com economy.
Working with Amazon in mind, Wright Runstad signed a controversial agreement with the public development agency that owned the building. The deal drew attention because critics argued that it was made too quickly and the public had little time to study it.
PacMed kept the ground floor and basement for a clinic, but Wright Runstad’s 99-year lease allows it to renovate the rest of the former hospital wards into offices and sublease the space at a profit.
The 184,000 square feet at PacMed can accommodate some 800 employees. But by the time Amazon moved into the renovated building in 1999, it had already outgrown the space.
Amazon eventually leased an additional 446,000 square feet in two buildings at the Union Station development in the Chinatown International District. The company runs an employee shuttle between the locations.
“They were [leasing] space in a very frenzied period of time,” Spencer said. “Now that the dust has settled and the stock has bounced back, they could certainly plan a more efficient campus.”
Despite its prominence, the PacMed building has drawbacks beyond a divided work force. There is little in the way of restaurants and shopping within walking distance, and the offices are not near any major public-transportation hubs.
But there are reasons Amazon might decide to stay, several real-estate experts pointed out.
As part of its deal with PacMed, Wright Runstad can develop a 220,000-square-foot building on the Beacon Hill property for Amazon to expand into.
Using satellite offices also gives the company more flexibility to grow and shrink than having all of its buildings in a single location.
But most of all, Amazon would have a hard time creating an office as distinctive as the one it now calls home.
“They have good campus identity where they are now,” said broker Rob Aigner, the executive managing director of Colliers International’s Northwest region. “How do you duplicate that in a downtown environment?”
Business reporter Monica Soto Ouchi contributed to this report.
J. Martin McOmber: 206-464-2022 or email@example.com