Amazon achievement heart. Picture courtesy of Amazon
Amazon is delaying the groundbreaking of PenPlace, the second part of its HQ2 undertaking in Arlington, Va., in line with Bloomberg, CNBC and a number of different information shops.
The three.3 million-square-foot undertaking is slated to comprise three 22-story workplace buildings and a separate amenity constructing named The Helix. JBG SMITH is the developer behind each phases.
PenPlace can be situated on the Northeast nook of twelfth Avenue and South Fern Avenue, and comprise 2.8 million sq. ft of latest workplace house, together with 115,000 sq. ft of ground-floor retail. Moreover, 2.5 acres of public open house are deliberate.
Amazon’s announcement to halt improvement comes on the heels of a big interval of layoffs which have affected the tech sector since final yr. Amazon introduced it’s seeking to shed 18,000 jobs, a course of which began in November 2022, following a interval of slower progress for the e-commerce large.
The corporate didn’t point out when it would resume building work at PenPlace, however the first part of its undertaking, Met Park, continues to be slated to come back on-line in June, with 8,000 new staff already assigned to the two.1 million-square-foot campus. At full capability, Met Park will accommodate as many as 14,000 workers.
Dedication to Northern Virginia
The corporate stays dedicated to its greater than $2.5 billion funding in HQ2, the place it plans to convey roughly 25,000 jobs over the subsequent decade.
In line with its fourth quarter outcomes, Amazon’s working earnings decreased to $2.7 billion internationally, in comparison with the $3.5 billion within the fourth quarter of 2021. Its working earnings for the complete yr decreased to $12.2 billion, down from the $24.9 billion the earlier yr.
Nevertheless, the corporate’s AWS phase fared significantly better. For the complete 2022 yr, it reached an working earnings of $22.8 billion, above the $18.5 billion recorded in 2021. The corporate has a large knowledge heart presence in Northern Virginia, which it plans to double over the subsequent 17 years, with a $35 billion funding.
Tech sector’s impression on workplace leasing
In line with a Savills report, workplace leasing exercise has been considerably impacted by job cuts within the tech sector. The fourth quarter of final yr noticed 2.2 million sq. ft of leases signed, the bottom quarterly quantity recorded over the previous 5 years.
In the meantime, CBRE discovered that tech corporations accounted for 17 of the highest 100 leases in 2022, down from 36 the earlier yr. The rise of hybrid work, coupled with rising rates of interest and considerations over a possible recessionary interval this yr prompted workplace occupiers to downsize and halt growth plans.
