Covid Won’t Change Company’s Office Footprint, Large Campus Strategy

Adelicia Caree

Amazon occupies more than 44M SF of offices across the world, and like many workplaces throughout the last year, they are still mostly empty. Roughly 90% of the company’s office-using employees are working remotely today, but the company hopes to bring people back by the fall, Amazon Vice President of Global Real Estate […]

Amazon occupies more than 44M SF of offices across the world, and like many workplaces throughout the last year, they are still mostly empty.

Roughly 90% of the company’s office-using employees are working remotely today, but the company hopes to bring people back by the fall, Amazon Vice President of Global Real Estate and Facilities John Schoettler told Bisnow in an interview Monday. 

Courtesy of Amazon

Amazon Vice President of Global Real Estate and Facilities John Schoettler speaking at a fundraising event for Seattle nonprofit Mary’s Place in 2018.

The shift to remote work during the coronavirus pandemic has led many companies to rethink their office needs and downsize their footprints, causing concern for office building owners. A CoreNet Global survey in January found that 59% of businesses expect their office footprints to shrink. But the Seattle-based e-commerce giant isn’t one of them.

Schoettler, who oversees Amazon’s global portfolio of office space, said the past year hasn’t changed the way the company thinks about its office strategy. While acknowledging that predicting long-term office trends is a “fool’s errand in a way,” he said Amazon still views the office as the best place for work because of the ability for employees to collaborate, and it still envisions its footprint centered around large corporate campuses like its Seattle headquarters and its HQ2 development in Northern Virginia. 

“We’re not thinking that the result of the pandemic is going to forever change the way that Amazon conducts its work or our culture, which is collaboration and pioneering and people working together,” Schoettler said. “That is where we do our best work.”

Since Schoettler joined in 2001, Amazon has grown its office portfolio from 1M SF to more than 44M SF across 400 offices in 54 countries. He leads the team that manages that office footprint, and he oversees Amazon’s physical security, environmental health and safety, disaster preparedness and corporate travel. 

The tech giant doesn’t plan to give back any of its existing office space, and it still plans to occupy all of the future office space to which it has committed, including at least 6M SF at HQ2, Schoettler said. But he said it hasn’t yet decided what level of office growth it will pursue after it fills all of that space. 

“Perhaps we will absorb our office space that we currently have and not need to grow it as fast, but we’ve not discussed the need to shed any of our current space,” Schoettler said. 

The company has already hired over 1,600 people at HQ2 in spaces that it has occupied under short-term leases with JBG Smith, Schoettler said. The company broke ground in January 2020 on its first new office buildings on the Metropolitan Park site in its newly named National Landing neighborhood. Construction has remained on schedule throughout the pandemic, Schoettler said.

Last month, Amazon unveiled the renderings for the second phase of HQ2 at the PenPlace site. Phase 2 includes three 22-story office towers and The Helix, a double-helix-shaped building that will serve as the centerpiece for the development. Schoettler said Amazon decided to pursue the design for The Helix because it wanted something that had never been done before. 

“We want to take an opportunity like that and create something that is totally iconic and amazing for our employees and the broader community,” Schoettler said. 

The full interview is below, lightly edited and condensed for clarity. 

Bisnow: I want to start with Amazon’s national office strategy and policies. This last year has introduced a movement in remote work with people having to adapt to the pandemic. Now one year in, what is Amazon’s remote work policy today? What percentage of your office workers are still working from home versus coming into the office?

Schoettler: Well it’s still a large percentage, about 90%, are still working from home. From the very beginning, the health and safety of our employees has been a top priority. Our buildings have always remained open because there are a lot of employees whose jobs cannot be effectively done from home. Those are primarily individuals who work in labs and who work on devices, and they cannot do that remotely. So they have been coming in, and we have been making sure they can do so in a very safe way with physical distancing and all of the appropriate PPE, from thermal scanning from the moment they enter the turnstile to making sure everyone has a face covering. All the physical distancing queues are well marked throughout the entire facility, deep cleaning, hand sanitation, you name it, it’s all been there.

But to your broader question, a large percentage, I would say around 90%, are still working from home. We believe that our best work is done in the office, and when we can be together and collaborate and take challenges and turn those into opportunities to serve our customers better. We look forward to a day when we are able to come back to work, quite honestly. We believe that as vaccinations become more widely available, and case counts in a particular city, state or country, for that matter, stabilize, as well as hospitalizations and also death rates stabilize, we believe that employees will feel comfortable and eventually start coming back. We’re hopeful that happens by this fall, if not sooner. But it’s really hard to tell. There are a lot of unknowns and we’re following all of the most recent guidance. This is something that we are monitoring constantly.

Bisnow: You mentioned that you believe the office is where you work best. I’m curious, though, has this past year changed the way that you think about remote work at all, in terms of allowing employees more flexibility to work from home if they want to, or to spend part of their week from home, or anything like that?

Schoettler: We’re still trying to figure that out. We believe that we’ll come back pretty much as we were pre-Covid. We clearly have learned a lot throughout this past year, and all of the teams are different. They all work differently. I don’t think one size fits all, so I think it’s very difficult to say on a broad scale that all employees will be able to work remotely. It all depends on the uniqueness of each team and what it is that they’re currently doing. It’s very difficult to collaborate and solve big problems remotely. And there may be opportunities where employees come in, they work on issues, they scrum for a bit, they come back together, take a look at what needs to be done next, and maybe they’ll break and go home. You know, everyone’s circumstances with regards to remote working are different. Not everyone has a nice spare bedroom or office to go to, oftentimes there are young children at home and other distractions. So we will be flexible with our employees, but it’s really hard to predict exactly what that makeup will look like.

Bisnow: You said you believe you’ll come back as you were pre-Covid. Does that mean Amazon won’t need to reduce the amount of office space it requires going forward? Do you think this could change your overall office footprint?

Schoettler: I don’t believe so. Our office portfolio and the way we grow, those are long-term propositions. The buildings in Arlington are not delivering until the 2023-2025 time frame. We have lots of buildings that are delivering out on the horizon at some point. Amazon is a company that continues to grow. We may utilize our space differently, the way it is utilized. Not every individual may need a fixed desk. We may have more agile working and more collaboration spaces. And perhaps we will absorb our office space that we currently have and not need to grow it as fast, but we’ve not discussed the need to shed any of our current space.

Bisnow: To that last point, as you look to the future, you think Amazon might not add more office space that you haven’t already leased, that you might not expand quite as much as you would have without the pandemic?

Schoettler: It’s super hard to say. That’s prognostication that I think that’s kind of a fool’s errand in a way to try to think about what we don’t know today. I do know the only constant in life is change. And often I say what I know today will change tomorrow. And we’re always very agile and able to be very flexible. But I really think that we’re just going to have to wait and see, to be perfectly honest with you.

Bisnow: Could you anticipate Amazon potentially expanding to new cities? One of the trends over the last year has been people moving to different cities and wanting to live in different parts of the country. Do you think you might open offices in other markets where you don’t have offices to accommodate more flexibility for employees?

Schoettler: I don’t think so. We are focusing on the Puget Sound region, Seattle and Bellevue. We’re focusing on Arlington, our HQ2. We have a center of excellence for our operations teams in Nashville. We’re focusing on areas where people can come together and collaborate. We’re not looking at adding a lot more smaller offices in locations. So we’re really focusing on major hubs.

Bisnow: This has been a big conversation in commercial real estate about whether office tenants are going to need as much space in the future, so it’s interesting for the industry to hear how Amazon thinks about that because you’re such a large company. When you say you don’t plan to shed space, and you’re still going to need all the offices you have, what is the strategy behind that? What kind of discussions and thinking have gone into that conclusion that you still need all this office space?

Schoettler: We are really focused on the current issues right now, and that’s being able to bring our employees back to the workplace in a very safe manner, and when it’s right for them. We have not looked beyond the horizon to think about what we need in future, other than the existing plans and the commitments that we’ve already made.

I’ve been asked throughout the past year what our future is going to look like, and I do not have a crystal ball. I do not pretend to think that I know. What we certainly don’t want to do is make one-way-door decisions where you make a pronouncement and you go off in a certain direction and you realize that wasn’t the right decision and you want to come back and it’s hard to do that. We tend to focus on opportunities where we can make two-way-door decisions, and that’s currently our strategy.

Bisnow: I want to move onto HQ2 specifically. You had a blog post in February where you revealed these new renderings and said you’re still committed to the initial plans to all of the offices and employees that you have committed to in Arlington. Obviously that plan was created in late 2018, 2019, and the world has changed quite a bit. What gives you the confidence to move forward with this big of a project in this environment?

Schoettler: Well, as I mentioned earlier, these are long-term decisions and we take a long-term view. And we believe that a year from now, we’re very hopeful the pandemic will be behind us and we can return to more normal in terms of what it was like pre-Covid. I’m sure we will take into account some of the things that we’ve learned in the past year and continue to modify and change along the way, but we’re not thinking that the result of the pandemic is going to forever change the way that Amazon conducts its work or our culture, which is collaboration and pioneering and people working together. That is where we do our best work.

Placeholder

A rendering of Amazon’s plans for the PenPlace portion of HQ2.

Bisnow: The latest renderings of HQ2 included the Helix tower, which generated quite a bit of buzz here in the D.C. area. It’s certainly going to stand out among the skyline in Northern Virginia. Can you talk about what that building’s going to look like on the inside? How are employees going to use that Helix tower? And are there ways the public can use it?

Schoettler: Yes, and let me explain that to you. So are you familiar with the Spheres in Seattle?

Bisnow: Yes, I am.

Schoettler: So we’ve basically taken what we’ve learned from the Spheres: the ability to create an alternative workplace for employees that is surrounded with plants and biophilic in nature, and we’ve just taken it to a whole new level. It’s super exciting to be working on a project such as the Helix that quite honestly is a project that’s never been done before. If it had been done before, it probably wouldn’t be the right thing for us to do. So we want to take an opportunity like that and create something that is totally iconic and amazing for our employees and the broader community.

So imagine, this will be the tallest of the buildings on the PenPlace site. It’s 350 feet tall, which is slightly over 22 stories tall. It will have roughly about 15 floors in it. There will be a 1,500-seat meeting center that will be subterranean below the facility itself, as well as a 300-seat launch space where we will be able to use that space for launching future products. And also it will be available for other space when it’s not being used as a launch space, such as a meeting space for Amazon and also the community when it’s not being used by Amazon. There will be artists in residency throughout the space. So there will be the ability to work with local artists, as well as the community. And having art infused with biophilia throughout the space. It’s going to be remarkable on the inside, just as the Spheres are.

And then on the outside, we have this incredible exterior hill climb. So in Seattle, because of the space in which we had to work with, we weren’t able to incorporate the exterior experience into the structure. And so this building, it’s a double helix, so think of the twisted staircase, and on one side you can walk up just as if you’re walking on a hike in the mountains, and all the plant materials will be indigenous to the local region, and then as you come down, that’s more of an area where you can stop and rest, and places of repose, reflection, where groups can congregate. It’s more seating areas as you come down the building. 

Bisnow: That Helix tower is part of the second phase, and the first phase is already under construction, it broke ground in early 2020. So where does that stand now? When do you anticipate those buildings will be complete and Amazon workers can move in?

Schoettler: The buildings are under construction, and we’re right on schedule, even through Covid. Clark Construction has done a wonderful job and has maintained strict Covid guidelines throughout, and workers have remained safe. The building is on track and due to open in 2023. And that’s when we look forward to welcoming Amazon employees to the first HQ2 building, which is Metropolitan Park.

Also, we have over five buildings that we’ve leased from JBG Smith. We’ve assembled almost 4,000 seats, and we have roughly 1,600 employees that are currently working in HQ2.  

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A rendering of the first phase of Amazon HQ2 development, seen from 15th and Eads streets.

Bisnow: I wanted to ask about those leases specifically. I’m not sure if I’ve seen how long-term those are. Once Amazon moves its employees into this first phase of new development, are you going to exit some of those leases?

Schoettler: Yes. They’re short-term leases. JBG has been wonderful to work with. Those are three- and five-year leases, and we also have the flexibility to change that should we need to, but I don’t anticipate needing to make alterations to our current plan.

Bisnow: You mentioned that you may make changes to your interior office space layout. As you’re looking at these HQ2 buildings that are under construction, have you made any changes to the interior design, the way those workplaces are laid out or are you considering any changes?

Schoettler: We’ve been building buildings in Seattle for the past decade, and as a building comes up, we work with our customers, which are the Amazon employees, we get feedback on what works, what they like and what they don’t like, and each building is a new iteration of the prior design. So we have over a decade of research working with teams to know what works and what doesn’t, and we continually iterate on our buildings. And we go back and refresh the legacy buildings, the older buildings, to make sure there’s parity across our entire portfolio. That’s not just here in Seattle or Northern Virginia, it’s done globally. In Virginia, we continually work with groups, and we have focus groups to get their feedback and we’re constantly tweaking the designs.

Bisnow: So it sounds like that’s still in process? You don’t have the final plans for what those workspaces will look like yet?

Schoettler: Yeah, they’re very close to being baked, but they’re not much different than what our current spaces in Seattle look like: with neighborhoods for drop-in that’s more agile, there are areas with fixed desks, because certain jobs require they have desks every day with a particular setup, and then lots of different collaboration spaces and casual areas, very residential in nature and design. But like I said, they are an evolution of what we’ve been doing for the past decade or more.

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