A Big Bet That Amazon is Coming to Crystal City

• April 13th 2018

by Nena Perry-Brown

The DC area has gotten a lot of attention since three jurisdictions in the region were announced as making the shortlist for Amazon's second headquarters. Regardless of which city is chosen, JBG Smith is poised to win big.

According to Bloomberg, the Third Avenue Real Estate Value Fund is prepared to up the ante on its investment in JBG Smith, a real estate investment trust (REIT) at which Third Avenue already owns $10 million in shares.

Yesterday afternoon, JBG's shares were trading at $34.05; Third Avenue, however, has been predicting that shares will trade at over $40 if Amazon chooses to settle in Crystal City, where JBG Smith has a major presence after buying out Vornado.

It also stands to reason that JBG's holdings throughout the neighborhoods DC pitched, although smaller than their Crystal City portfolio, mean that the company would also benefit if DC is selected. 

In the meantime, Third Avenue has already made arrangements and informed investors of its intent to purchase JBG Smith shares at $30.50 and $31 whether or not Amazon lands in the DC area. Those options to purchase would still be valid at “a meaningful discount to [net asset value] should an additional 50,000 jobs be added to DC in the next five years,” enabling them to buy shares at $36.50 and $37.

In an investment package from the third quarter of last year, JBG Smith touted its portfolio and its work with local authorities on HQ2 submissions. If that report is any indication, the firm intends to focus its near-term energies on its development in Crystal City, a neighborhood the company thinks would be the best option for Amazon.

This article originally published at https://dc.urbanturf.com/articles/blog/speculation-over-amazon-hq2-is-a-boon-for-jbg/13838.