February 14, 2019 / 8:20 PM / 3 months ago

JBG Smith shares rise after Amazon.com nixes NY HQ

Feb 14 (Reuters) - Shares in JBG Smith Properties rose 1.5 percent on Thursday, outperforming the office real estate sector, as some investors bet that it could win new business after Amazon.com Inc said it scrapped plans to build a headquarters in New York.

JBG Smith announced on Nov. 13 that Amazon had selected its National Landing, Northern Virginia assets for a headquarters location giving Amazon exclusive rights to lease space in several JBG buildings.

Shares in JBG Smith, a leaser and developer of mixed use properties, were last up 1.22 percent at $40.45, on track for their biggest daily percentage gain since Feb. 7. Trading volume was 1.1 times the 10-day moving average by 2:39 EST (1939 GMT).

JBGS outperformed the Dow Jones U.S. Industrial and Office REIT index, which was up 0.03 percent on the day.

“It seems to be somewhat justified by the Amazon New York news. The share price reaction reflects shareholder optimism that you could have marginal increase in Amazon’s need for space in National Landings,” said Daniel Ismail, analyst at Green Street Advisors in Newport Beach, California.

But Ismail said the optimism was cautious “particularly in light of Amazon’s comments that they’d also be growing in other geographic regions across the U.S. and Canada.”

JBG Smith stock has risen about 5 percent since the November announcement, roughly in line with the office REIT index.

Amazon said it canceled its New York headquarters plan after opposition from local politicians and some would-be neighbors.

Shares in some office REITs with New York locations dipped after the news.

“The benefits to the NY office REITs was fairly minor to begin with. The impact was more on the marginal benefit or negative for Manhattan office fundamentals,” said Ismail.

SL Green Realty was last down 1.5 percent while Vornado was down 0.7 percent. Shares in Paramount Group , which reported results late Wednesday, were down 2.2 percent. (Reporting By Sinéad Carew; Editing by David Gregorio)

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