As Amazon.com Inc.'s search for its second headquarters begins to narrow, the Crystal City neighborhood of Arlington, Va., has emerged as one of the top contenders, The Washington Post reported Nov. 3, citing people close to the process. The e-commerce giant is reportedly holding advanced discussions with officials, including how quickly to move its employees to the area and which offices to occupy.

Media reports indicate that Amazon will split its second headquarters, dubbed HQ2, between two locations, with about 25,000 employees at each location. In addition to Crystal City, Dallas and Long Island City — a neighborhood just outside Manhattan in New York City's Queens borough — are also among the front-runners.

JBG Smith Properties, a Washington, D.C. area landlord, is the only publicly traded REIT with a meaningful presence in the Crystal City office market. The company's 21 Crystal City office properties span nearly 6.5 million square feet and many are clustered near the Crystal City station of the region's metro transit system.

JBG Smith's share price increased 4.25% on the trading day following the Post's report, compared to a 1.56% increase for the SNL U.S. REIT Equity index the same day.

Crystal City has about 11 million total square feet of office inventory, with an overall vacancy rate of 23.3%, according to consultancy CBRE's third-quarter "Northern Virginia Office MarketView" report.

Multifamily operators in the area could also stand to benefit, as new workers search for housing and stretch the existing inventory.

According to CBRE's report, 10,379 apartment units are located in the Pentagon City-Crystal City area of Arlington, and they are 95.7% occupied. Effective rent for apartment units in the area is $2,220 per month, and rent for class A high-rise units is slightly higher, at $2,403.

Seven U.S. equity REITs own 6,619 apartment units in the Pentagon City-Crystal City area. JBG Smith owns the most units in the area, with four multifamily properties totaling 2,850 units, while Equity Residential owns six properties in the area, aggregating 1,541 units.

In the Greater Arlington and Alexandria region, Equity Residential owns an additional 18 properties, spanning 5,633 total apartment units. UDR Inc. and AvalonBay Communities Inc. own 4,325 and 3,768 units, respectively, in the region.

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