Amazon Tacks on a Rare Seattle Lease While It Grows Elsewhere

(Bloomberg) -- Amazon.com Inc.’s announcement this month that it’s letting a lease expire on one of its Seattle offices fueled the narrative that the company is retreating from the city where it got its start.

What went unreported: Amazon was expanding in another building nearby.

The e-commerce giant has committed to an additional 66,000 square feet (6,100 square meters) at 5th and Bell, which currently houses teams working on Amazon’s cashier-less Go stores, a spokesman confirmed.

The new lease partially makes up for the 180,000 square feet that Amazon said it’s giving up at 2201 Westlake, a move that will involve relocating about 1,000 human-resources employees to other properties in Seattle and elsewhere in the Puget Sound area.

Amazon has threatened for years to focus its growth outside Seattle as a rebuke to city policies it dislikes. But unwinding a massive campus that spans more than 12 million square feet would never be practical. The company owns about 45% of its offices in Seattle and employs tens of thousands of workers who may not want to commute to the suburbs once offices reopen.

“For operational security reasons, we typically prefer to be the sole tenant in buildings and, in this case, have decided to take the remaining floors in our Otter building,” an Amazon spokesman said in an emailed statement, using the company’s name for its office at 5th and Bell.

The new space, which Amazon plans to occupy sometime next year, will be used primarily for labs, not seating for office workers, nor for any employees relocated from the expiring Westlake lease, according to the company.

“We are not looking to lease additional office space in the city,” the spokesman said.

The recent moves show how Amazon’s real estate strategy has shifted after it spent years building an urban campus that came to dominate Seattle’s office market. The company isn’t rushing for the exits, nor is it gobbling up space at the rate it did during the last decade.

Instead, it’s focusing on a regional growth strategy that includes eventually putting some 25,000 workers in nearby Bellevue. The company also recently surveyed employees about other suburbs where they might want to work. A new page on Amazon’s website details its presence and investments in the Puget Sound region, not simply Seattle.

The political climate has shifted against Amazon in Seattle in recent years after it paused some expansion projects and backed the repeal of a tax on businesses that would have raised money for homeless services and affordable housing. The company also waded -- unsuccessfully -- into last year’s Seattle City Council election.

In July, local officials passed a new levy that will tax large businesses on employees who make at least $150,000 a year. Amazon hasn’t commented publicly on the tax, which is expected to raise more than $200 million annually and cost the company even more than the earlier proposal.

Amazon is still trying to sublease parts of a Seattle office tower it said it would ditch after the debate on the earlier tax, which was scuttled before it could take effect.

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