{"id":16681,"date":"2020-11-03T10:39:32","date_gmt":"2020-11-03T16:39:32","guid":{"rendered":"https:\/\/theamericangenius.com\/housing\/?p=16681"},"modified":"2020-11-03T10:39:32","modified_gmt":"2020-11-03T16:39:32","slug":"amazon-just-bought-hotel-but-why","status":"publish","type":"post","link":"https:\/\/theamericangenius.com\/housing\/corporate\/amazon-just-bought-hotel-but-why\/","title":{"rendered":"Huh, Amazon just bought a hotel… but why?"},"content":{"rendered":"

Amazon is everywhere these days. It is a delivery service that offers free two-day shipping with Amazon Prime<\/a>. It is a grocery store with its food delivery service, Amazon Fresh<\/a>. It is a television and film producer and distributor through the company\u2019s Amazon Studios. And now, is it a hotel?<\/p>\n

The giant e-commerce company has recently purchased the Residence Inn by Marriott near its second North American headquarters (HQ2) in Arlington, Virginia. But, no need to fret, Amazon isn\u2019t going to be a hotel chain any time soon… yet. However, the company has tried steering in that direction already with Alexa for Hospitality<\/a>, which offers a voice control system for hotels.<\/p>\n

This hotel is part of the 11.6-acre development expansion in PenPlace \u2014 Arlington County\u2019s largest undeveloped lot. But, the hotel isn\u2019t what Amazon is interested in. The location is. According to an Amazon spokesperson, the hotel will be demolished. Even though it doesn\u2019t need to be removed for development to continue, it\u2019s still going to be taken down. With it gone, Amazon will be able to<\/a> \u201cmaximize its new space and create a cohesive employee campus that aligns with its vision.\u201d According to Forbes<\/a>, Amazon has committed to employing 25,000 people by 2030. So, it\u2019s going to need to maximize that space to fit everyone in it.<\/p>\n

And, this expansion comes with a $148.5 million price tag<\/a>. Acorn Development LLC, a subsidiary of Amazon, from Blackstone Group LP made the purchase back in September this year. In July of 2019, Blackstone had purchased the property for only $99.1 million. By Amazon purchasing the property, Blackstone profited almost $50 million.<\/p>\n

With the hospitality industry being hit so hard by the pandemic, will other companies follow Amazon\u2019s lead? Will they see hotels as an opportunity to acquire a good amount of space for a sweeter price with the added bonus of not having to deal with the landlords?<\/p>\n

In a statement<\/a>, Frank Cohen, chairman and CEO of Blackstone\u2019s non-traded real estate investment trust, said, \u201cThis sale illustrates our ability to generate value for our investors by identifying attractive real estate assets in desirable locations. We will continue to invest in assets where we have high conviction and selectively sell where we see compelling pricing.\u201d<\/p>\n

While this all makes sense, I\u2019m not so sure if buying hotels is going to be something all companies will shift to. In this case, the Residence Inn in Pentagon City that Amazon purchased helped the company secure control over an entire 11-acre square block in PenPlace. So, Amazon\u2019s decision is not based on the hotel. Instead, it is based on how purchasing that hotel property is going to help them achieve its HQ2 plans.<\/p>\n

However, hotels as real estate could be a benefit for struggling hotels. Hotels who might not be able to sail through this storm could try to get as much as they can. And investors, maybe they could make a profit like Blackstone.<\/p>\n","protected":false},"excerpt":{"rendered":"

(REAL ESTATE CORPORATE) Amazon is everywhere, and now they are a new owner of a Residence Inn hotel by Marriott in Arlington, Virginia. But for what purpose?<\/p>\n","protected":false},"author":337827,"featured_media":16682,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"wds_primary_category":0,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[101],"tags":[1317,356,2043,1234],"class_list":["post-16681","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate","tag-amazon","tag-commercial-real-estate","tag-hotels","tag-real-estate-news"],"jetpack_featured_media_url":"https:\/\/theamericangenius.com\/housing\/wp-content\/uploads\/sites\/2\/2020\/11\/HotelDoorOpen.jpg","jetpack_sharing_enabled":true,"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/16681","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/users\/337827"}],"replies":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/comments?post=16681"}],"version-history":[{"count":1,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/16681\/revisions"}],"predecessor-version":[{"id":16683,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/posts\/16681\/revisions\/16683"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/media\/16682"}],"wp:attachment":[{"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/media?parent=16681"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/categories?post=16681"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theamericangenius.com\/housing\/wp-json\/wp\/v2\/tags?post=16681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}