PSP Investments Scores Big Boston Lease With Amazon

Nathalie Wong of Bloomberg News reports Amazon extends Boston footprint with seaport office lease:

Amazon.com Inc. is taking more office space in Boston’s Seaport district.

The e-commerce giant signed a lease for 630,000 square feet (58,500 square meters) at One Boston Wharf Road, a 17-story mixed-use building, according to a statement Tuesday.

The deal follows Amazon’s agreement in 2018 to rent 430,000 square feet of offices at 111 Harbor Way, which is under construction nearby and set to be ready this year.

The leases are part of the company’s plan to add more than 5,000 jobs in Boston over the next few years -- most across the two new buildings. The positions it plans to create include jobs in software development, artificial intelligence and machine learning, Amazon said in its own statement Tuesday.

The tech titan has been expanding its workforce beyond Seattle, setting up major office centers and satellite locations in other localities including New York, Vancouver, and Los Angeles.

Construction of One Boston Wharf Road will start later this year, with completion scheduled for 2024, according to the statement. Massachusetts-based WS Development and Canada’s Public Sector Pension Investment Board are developing the building, which will also have ground-floor retail space and a performing arts center.

“Boston is full of world-class universities and colleges,” Jeremy Sclar, chairman and chief executive officer of WS Development, said by phone. “More people are staying and companies are realizing if they come here, they can hire this talent.”

WS is the lead developer of both properties Amazon is leasing. They’re part of a 33-acre (13-hectare) project that also will include housing and open public spaces.

One Boston Wharf Road will be connected to 1.5 acres of parkland that’s set to open later this year and was designed by the landscape architect behind New York’s High Line.

Annie Palmer of CNBC reports Amazon plans to create 3,000 jobs in Boston with new office expansion:

Amazon plans to create 3,000 jobs and open a new office in Boston, the company announced Tuesday. 

The new hires — expected to be focused on software development, artificial intelligence, machine learning, management, HR and finance — will support its Amazon Web Services, robotics, Alexa and nascent Amazon Pharmacy teams. Amazon expects to add the jobs over the next several years.

Amazon said it leased a 17-story office tower in Boston’s Seaport district to accommodate the new hires. The 630,000-square-foot office, which is set to be completed in 2024, will include working space, innovation labs and mixed-use common areas for employees, as well as two theaters and other spaces for the public.

The expansion builds on Amazon’s growing presence in Boston. In 2018, Amazon said it would create 2,000 jobs in Boston and announced it would lease a separate 17-story mixed-use building in the Seaport district. Construction on the tower is expected to be completed this year.

Amazon has been hiring at unprecedented levels during the pandemic, buoyed by a surge in e-commerce demand, as stuck-at-home shoppers turned to online retailers for both essential and nonessential goods.

The company added more than 400,000 employees in 2020, which pushed its global workforce to more than 1 million. Last year, Amazon announced it will add thousands of jobs at tech hubs in major cities, including New York, Detroit and San Diego.

Tatiana Walk-Morris of Retail Dive also reports Amazon to grow its Boston tech hub, add 3K jobs:

• Amazon is expanding its Boston Tech Hub and adding more than 3,000 tech and corporate roles over the next few years supporting Amazon Pharmacy, Amazon Web Services, Amazon Robotics, Alexa and other divisions, the e-commerce retailer announced on Tuesday. 

• The company plans to hire for positions in software development, artificial intelligence and machine learning, as well as back-office roles like human resources and finance, per the company announcement. 

• The company rented a 17-story office tower for its expanding Boston staff. The company will be leasing another office space, which is under construction and is expected to be completed later this year, to house 2,000 Amazon workers.

 Dive Insight:

Amazon's Boston team plays a critical role in multiple areas, including Alexa, Amazon Pharmacy and Amazon Web Services, Rohit Prasad, vice president and head scientist for Alexa at Amazon, said in a statement. The company noted that it currently has more than 3,700 employees in its Boston Tech Hub. 

"Much of the technology that makes Alexa smarter every day is invented in Boston," Prasad said. "Our teams here play a key role in driving Amazon's innovations ... and help us keep delighting customers around the world."

The e-commerce giant has been building up its Boston presence for the past few years. The company reportedly began seeking out space in the city back in 2018 as it scaled up its Boston-Cambridge area workforce. Meanwhile, the retailer has been opening up tech hubs in other cities, such as Chicago, New York, Denver, Dallas, Detroit, Phoenix and San Diego. The company's Chicago-area teams support Amazon Web Services, Amazon Advertising, and its transportation and operations units. The company's workforces in New York and other cities contribute to Alexa, Amazon Advertising, OpsTech, Amazon Fashion, Amazon Fresh, Amazon Web Services and other subsidiaries.

Over the years, multiple other retailers, including Yoox Net-a-Porter and Lowe's, have also created their own tech hubs. Lowe's in 2019 announced plans to hire up to 2,000 tech workers in the Charlotte, North Carolina, area. The move was part of the home improvement retailer's effort to revamp its technological infrastructure by 2021. 

Lastly, Nick Kolakowski of Insights Dice reports Amazon adding technologists to Boston technology hub:

Amazon is adding 3,000 more employees to its Boston Tech Hub, where they’ll join 3,700 technologists already at work on a number of technology initiatives, including Amazon Web Services (AWS), Amazon Robotics, Alexa, and Amazon Pharmacy. 

Many of those new hires will need artificial intelligence (A.I.), machine learning, and software development skills. In addition to those specialists, Amazon is also seeking project managers.  

Boston boasts a number of features that make it exceptionally attractive to tech employers of all sizes. Thanks to its cluster of local universities (including Harvard and MIT), it can offer a robust pipeline of young, hungry talent. As with other prominent tech hubs across the country, there’s also all the infrastructure you need to support growing businesses, including access to major airports, office space, and venture capital. 

The growing presence of companies like Amazon could help maintain Boston’s reputation as a major research and development hub, even as smaller tech hubs such as Raleigh and Houston compete more aggressively for tech companies’ dollars and attention. According to CompTIA’s Cyberstates 2020 report, net technology employment in Massachusetts grew by 11,500 net new jobs in 2019. “capping a decade in which the commonwealth’s tech-related labor force expanded by 86,000 workers.”  

Nationwide, Amazon hired 427,300 employees between January and October 2020, bringing its total workforce to 1.2 million. Although 85 percent of the company’s employees work in its warehouses (which it terms ‘fulfillment centers’), it’s also hired a number of technologists, including many with highly specialized skills.

According to Burning Glass, which collects and analyzes millions of job postings from across the country, Amazon was particularly interested in hiring technologists with the following skills: 

As you might expect, mastery of AWS is key to many Amazon technology jobs (and fortunately, there are lots of options when it comes to AWS training and certifications). And like other tech giants, Amazon also wants many of its technologists to have working knowledge of the world’s most programming languages, including Java, Python, and C++. That’s good news for those who don’t necessarily have skill-sets in cutting-edge areas such as machine learning and A.I.; although as you know, that sort of highly specialized knowledge can land you a job pretty much anywhere. 

In geographic terms, Amazon has focused much of its hiring on Seattle, New York City, Silicon Valley, and Washington, D.C./Northern Virginia (where it’s also building its massive HQ2 headquarters). As you can see from the following chart, though, there’s been strong hiring in Boston, even before the latest announcement: 

If you’re a technologist in Boston, there might be a role for you at Amazon—especially if you have a background in artificial intelligence (A.I.) and machine learning.

So why is Amazon expanding its hiring in Boston?

Very simple. As Mr. Prasad who is head scientist for Amazon’s Alexa virtual assistant told Beta Boston: “Boston is one of the seats of learning in the United States, you have some of the world’s best universities and just this natural flow of talent into Amazon and other tech companies.”

Harvard, MIT, top tech companies all there, need I say more? It's a tech giant's dream location to attract top talent.

Interestingly, when I look at the second chart right above, Boston is still very under-represented in terms of Amazon's total workforce but that's to be expected as Amazon mostly hires people to work at its plants, not to write code.

Still, Amazon is primarily a technology company and many of those new hires will need artificial intelligence (A.I.), machine learning, and software development skills. 

So why am I discussing this deal? Because PSP Investments is part of the deal, releasing this press release yesterday: 

WS Development, in partnership with the Public Sector Pension Investment Board (PSP Investments), today joined Amazon, Boston Mayor Martin J. Walsh, and Massachusetts Governor Charlie Baker in announcing that a lease for 630,000 square feet of office space at the company’s 33-acre Boston Seaport development has been signed with Amazon.

“We are proud to continue our partnership with Amazon in Boston’s Seaport, a neighborhood that has grown to serve forward-thinking employers, residents, and retailers and that is now a global hub of innovation and talent,” said Jeremy Sclar, Chairman and CEO of WS Development.

“PSP Investments is pleased to join our partner WS Development in expanding Amazon’s presence in Boston’s Seaport,” said Kristopher Wojtecki, Managing Director, Real Estate, PSP Investments. “Amazon’s expansion will further enhance the innovation ecosystem and creative economy in this powerful technology and life sciences cluster.”

With this expansion, Amazon will be able to continue growing its job creation efforts in Boston and create 3,000 tech and corporate jobs over the next several years. The development, to be constructed at One Boston Wharf Road, Block L5 of the Boston Seaport development, is a 17-story, 707,000 square foot, mixed-use building designed by world-renowned Henning Larsen architects of Copenhagen, Denmark.

This is Amazon’s second full-building lease in the Seaport, the first being at 111 Harbor Way, a 525,000-square foot building now under construction by WS Development, which will be completed later this year and will bring 2,000 new technology jobs to Boston.

One Boston Wharf Road will also contain ground floor retail space and new performing arts center, comprising two live performance venues consisting of a 500-seat theater and a 100-seat black box theater, which together will add significant state-of-the-art capacity for the performing arts in Boston.  The building will front on Harbor Square park, a 1.5-acre signature green space that will open later this year, designed by James Corner Field Operations, the landscape architect behind New York’s High Line. 

The project will also fund approximately $5.5 million dedicated to the creation of affordable housing in Boston, as well as nearly $1.1 million of funding for job training in the City of Boston, providing opportunities for Amazon to work with the city’s Workforce Development team to prepare local residents for jobs in the technology industry.

Construction is scheduled to commence later this year with completion in 2024. 

About Boston Seaport

Culture, industry, and community converge in Boston’s Seaport district, a dynamic and vibrant neighborhood that has become synonymous with innovation and is redefining the City of Boston. Unlocked after a decade of development and $22 billion of public investment, Seaport is now home to an ecosystem of more than 350 companies, from global leaders in technology and biotech, to groundbreaking startups. In the heart of the neighborhood, WS development is transforming 33 acres of land, composed of 7.6 million square feet of residential, hotel, office, retail, entertainment, civic and cultural uses, as well as signature public open spaces. Currently, the project represents Boston’s single largest development under construction.

Combining the best of historic and modern-day Boston, Seaport has become a national destination for technology and life sciences employers, fashion, culture, dining and entertainment, and the arts, enhancing Boston’s position as one of the top cities in the world. For more information visit www.bostonseaport.xyz, follow Boston Seaport on Facebook, and @SeaportBos on Instagram and Twitter.

About WS Development

WS Development is a Massachusetts-based property developer and owner dedicated to the creation of places where people want to be.  With more than 20 million square feet of existing space and an additional five million square feet under development, it is one of the largest privately-owned development firms in the country. In business since 1990, WS is a vertically-integrated company that develops, owns, operates, and leases over 90 properties, including urban buildings, lifestyle centers, community centers, and mixed-use developments. Its goal is to be a contributing member of each community it serves. For more information, visit www.wsdevelopment.com or follow WS Development on LinkedIn.

About PSP Investments

PSP Investments is one of Canada’s largest pension investment managers with approximately $169.8 billion of net assets as of March 31, 2020. It manages a diversified global portfolio of investments in public financial markets, private equity, real estate, infrastructure, natural resources and private debt. Established in 1999, PSP Investments manages net contributions to the pension funds of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montreal and offices in New York, London and Hong Kong. For more information, visit investpsp.com or follow PSP Investments on Twitter and LinkedIn.

There's not much to add on this except to say that it highlights the importance of working with a great partner (WS Development) to gain access to top deals.

In fact, this says it all:

“PSP Investments is pleased to join our partner WS Development in expanding Amazon’s presence in Boston’s Seaport,” said Kristopher Wojtecki, Managing Director, Real Estate, PSP Investments. “Amazon’s expansion will further enhance the innovation ecosystem and creative economy in this powerful technology and life sciences cluster.”

Amazon is quickly becoming the anchor tenant of choice for many developers, just like Google, Microsoft and other tech companies.

The fact that this deal is struck while a pandemic is going on signals to me at least that competition for top tech talent is heating up and Amazon wants to be ready to hire top talent.

Competition is fierce in AI, machine learning, and data analytics, Amazon needs to have a strong presence in Boston, and I think there will be more deals down the road.

Below, a nice clip on Boston’s Seaport district. Who wouldn't want to work there, it's a beautiful city and a great district. They've thought of everything and that's why Amazon is expanding there.