SEATTLE—Two hundred and thirty-eight. That's the final tally of responses Amazon received to its request for proposals to locate a second headquarters campus somewhere in North America, the e-commerce giant said Monday. These came from 43 states and 11 assorted provinces, territories and districts, including the District of Columbia.

Since just 51 US metropolitan areas are home to a population of one million or more—one of the qualifications Amazon stipulated in its RFP—it stands to reason that some of the 238 submissions were long shots, and community leaders were aware of this. Neither Idaho nor Alaska are home to any metro areas that large, for example, but proposals came in from both states. And Amazon's hometown of Seattle reportedly submitted a proposal that the company keep its second headquarters in the same city where it's currently based.

However, given the potential payoff—an investment of $5 billion to build what Amazon is calling HQ2, and the creation of up to 50,000 jobs—it's understandable that the final tally of submissions far exceeded what analysts had predicted. MarketWatch's Rachel Koning Beals on Monday reported that dozens of submissions had been expected, not hundreds.

There's also the longer-term impact: Amazon estimates that its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city's economy, or $1.40 in economic benefit for each dollar spent by Amazon. Yet although Amazon tweeted that it will go through each and every proposal for HQ2, it stands to reason that not all have an equal shot.

After Amazon announced its RFP last month, automated investment manager AlphaFlow handicapped the five most likely HQ2 sites on the basis of real estate fundamentals. In an article originally published in Business Insider, AlphaFlow identified Pittsburgh as the top pick, followed by Cincinnati, Atlanta, Austin and Nashville.

“If there was ever a city that combined the resources Amazon will need with the housing supply that will be demanded by an influx of new workers and an environment like the home headquarters in Seattle, it's Pittsburgh,” according to AlphaFlow. “Located on the western side of Pennsylvania, it is geographically centralized. The fact that it is inland in a Great Lakes state means that there is little to block growth in the city, and the success of other tech giants' satellite offices in the city makes it a likely candidate.”

Citing data from Moody's, Business Insider published a second compendium of the 10 leading contenders for HQ2. Although Pittsburgh figured in the list, it was ranked fifth out of 10, ahead of New York City and behind Rochester, NY. Moody's data put Austin at the top of the rankings.

“Austin has a much lower cost of living than places such as Silicon Valley,” according to Moody's. “Even though house prices have been rising and are high for Texas or the South, they are well below those in California or the Northeast. Anecdotally the quality of life is high, and many want to live in the 'Silicon Hills.'”

On the subject of housing supply, Apartment List recently predicted that an influx of Amazon workers—whether newly hired or relocating—would increase rents up to an additional 2% a year in the metro chosen for HQ2. That would be on top of baseline rent growth without Amazon, which averaged 3.1% per year nationwide from 2005 to 2015.

Smaller metro areas with lower wages or severely constrained housing stocks, such as Raleigh, Pittsburgh, Baltimore, and San Jose, would be in line for the biggest rent increases stemming from HQ2, according to Apartment List. Conversely, larger metros with larger housing stocks, such as Los Angeles and Dallas, would see less of an increase; Apartment List projects it at 0.5% or less per year for those cities. “With America's aging housing supply and relative lack of new construction, this means the fix-and-flip market is going to see a major surge in demand in any city that is selected as a destination,” the firm states.

Instant Insights /

Amazon's Sifting Process Begins for HQ2

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