JBG Smith Jumps to Record With Amazon HQ2 Hopes Centering on Virginia

(Bloomberg) -- Amazon.com Inc. has yet to announce the winning city for its second headquarters, but investors in JBG Smith Properties seem pretty convinced that northern Virginia is going to take the cake.

The real estate investment trust, a top office landlord in Arlington’s Crystal City area, is benefiting from an Amazon bump after the Washington Post reported over the weekend that the e-commerce giant is in advanced talks about locating HQ2 in the Washington suburb.

JBG Smith shares jumped as much as 7.4 percent to a record high of $40.23. The company was formed in July 2017 when Vornado Realty Trust combined its Washington unit with local landlord JBG Cos.

“There is a ton of real estate already there, a lot of which is immediately available because it never fully recovered after the Department of Defense left,” Bloomberg Intelligence analyst Jeffrey Langbaum said. “Somebody like Amazon could come in and completely refresh the area, renovate buildings, add new buildings, etc., all while there is space there to be used immediately.”

The buzz around Crystal City isn’t new. Last month, Stifel Nicolaus & Co. upgraded its ratings on JBG Smith and Washington Real Estate Investment Trust in part because both companies could reap benefits if Amazon opened offices near America’s capital.

“From our management visits we’ve had in D.C., everyone has said it’s Crystal City,” said Alexander Goldfarb, an analyst at Sandler O’Neill & Partners who covers Vornado but not JBG Smith. He and Langbaum both highlighted the area’s relatively cheap real estate and proximity to Ronald Reagan Washington National Airport.

JBG Smith Chief Executive Officer Matthew Kelly told investors at an industry conference in June that the company is “well-positioned” for a possible Amazon HQ2 win.

To contact the reporter on this story: Lily Katz in New York at lkatz31@bloomberg.net

To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Christine Maurus, Steve Dickson

©2018 Bloomberg L.P.