Amazon Delaying Construction on Phase 2 of HQ2

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Amazon (AMZN) is pressing pause on the construction of the second phase of its Arlington, Va.-based second headquarters, the company announced Friday. 

The delay will impact construction of PenPlace, the second phase of HQ2, which consists of three 22-story office towers and the Helix, a 350-foot tall corporate conference center and indoor garden, which mirrors the plant-filled orbs in Amazon’s Seattle headquarters. Amazon acquired the land from the property from developer JBG Smith last summer for $198 million. 

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The PenPlace development was approved by Arlington County in May 2022 to bring 3.2 million square feet of office space, more than 100,000 square feet of retail and nearly 2.75 acres of public open space to National Landing.

The first phase of HQ2 is nearly finished, and in June, Amazon will begin to move approximately 8,000 workers currently in the area to the two newly completed office towers in the 2.1 million-square-foot development known as Metropolitan Park.

“We’re always evaluating space plans to make sure they fit our business needs and to create a great experience for employees, and since Met Park will have space to accommodate more than 14,000 employees, we’ve decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit,” John Schoettler, vice president of Amazon’s global real estate and facilities team, said in a prepared statement.

He addded the second headquarters has always been a multi-year project, and Amazon remains committed to Arlington, Virginia, and the greater Capital Region—which includes investing in affordable housing, funding computer science education in schools across the region, and supporting dozens of local nonprofits.

“We appreciate the support of all our partners and neighbors, and look forward to continuing to work together in the years ahead,” Schoettler said. 

Keith Loria can be reached at Kloria@commercialobserver.com.