New GCS Report Sheds Light on Amazon HQ2 Top 20

Amazon recently announced the shortlist for its highly anticipated HQ2 which includes 20 markets in 17 metro areas throughout the U.S. (and one in Canada). While the list of finalists contains many widely expected large markets such as Atlanta, Dallas, Chicago, DC, and New York; it’s clear that Amazon didn’t make these selections based on their size alone. Nine of the 10 largest US metro areas are represented in the shortlist but six of the 20 markets have populations below 2.5M, representing many smaller “second tier” metros.

Aside from population, the top 20 markets vary widely in terms of many other key demographic, economic, and quality of life indicators that typically guide a headquarters site selection. The economic and demographic diversity of these locations provides Amazon with ample opportunity to test different market types and profile the economic geography of a large swath of the United States in its search for the optimal location for HQ2.  

The finalist markets are more different than they are the same and, because of this, Amazon still has a lot of work to do in order to assess the pros and cons of each area and optimize among the many factors that are typically evaluated during an HQ site selection process. This piece from Newmark Knight Frank’s Global Strategy Consulting Group attempts to use typical HQ site selection metrics to draw general conclusions about the strengths, challenges, and risks of the finalist metros and speculate about which factors may be most important to Amazon as they continue the process of elimination necessary to select the ultimate home for HQ2.

Excerpt below.

“NKF divided the 17 finalist metros into groups based on their shared demographic and economic characteristics. While metros in each of these groups share many similar strengths and challenges, it’s important to note that these groupings are for illustrative purposes only and individual cities will behave differently on some metrics. The metro area categories are Mega Metros, Rustbelt Renaissance, and Stars of the Sunbelt.

When performing an HQ site selection, NKF finds that every company has a unique set of location factors driving their search. However, a few key factors are consistently important to nearly every HQ site search. NKF has taken the list of Amazon’s top 20 markets, divided them into our three metro categories, and performed a high-level evaluation using some of the most common qualitative site selection characteristics in addition to a sampling of Amazon’s unique location factors (as listed in the HQ2 RFP) to better understand the competitive positioning of the finalist markets. As shown below (in no particular order), a wide variance exists based on five key metrics...”

Read the full report titled, Amazon’s Top 20: HQ2 shortlist keeps company's options open.

Chris Volney
Managing Director, Global Strategy


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