Real Estate Stocks Reckon With Amazon's HQ2 New York Breakup

(Bloomberg) -- Real estate investment trusts are reacting to the news that Amazon.com Inc. is pulling out of its plan to build a headquarters in New York City after backlash from some residents and politicians.

REITs with exposure to the city fell after the news. SL Green Realty Corp., Vornado Realty Trust and AvalonBay Communities Inc. saw some of the largest drops, as the three companies are among the most exposed to the city’s commercial and apartment markets, according to Bloomberg Intelligence analyst Jeff Langbaum. The companies were hoping to benefit from the demand that would come from Amazon hiring as many as 40,000 workers over the next two decades, with an average salary of $150,000.

"If Amazon really doesn’t go to Long Island City, what it hurts the most is apartment owners," said John Guinee, managing director at Stifel, in a phone interview. When it comes to the office sector, Guinee lists Boston Properties Inc., Vornado and SL Green as those likely to be most impacted, if at all.

Real Estate Stocks Reckon With Amazon's HQ2 New York Breakup

REITs exposed to Nashville, Tennessee and northern Virginia have gained since the announcement, as Amazon will continue with its plan to build operations in both. For Virginia, this includes Arlington-based JBG Smith Properties. In Nashville, notable gainers include Ryman Hospitality Properties Inc., Highwoods Properties Inc. and Preferred Apartment Communities Inc.

As for a new HQ2 to replace New York, Amazon said in a statement that it does not intend to reopen the HQ2 search at this time, but hinted at future development opportunities for their New York operations.

"Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders who welcomed our plans and supported us along the way," the company wrote. "We hope to have future chances to collaborate as we continue to build our presence in New York over time."

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