Business

Amazon picks Back Bay for Boston expansion

Amazon boxes are seen stacked for delivery in the Manhattan borough of New York City, January 29, 2016. Amazon.com Inc on April 28, 2016 reported profit and revenue that blew past analysts' expectations, sending its shares soaring in after-hours trading and demonstrating the growing market power of its core retail business and new cloud services division. REUTERS/Mike Segar/File Photo TPX IMAGES OF THE DAY

Mike Segar/REUTERS/file 2016

After years building a large presence near Massachusetts Institute of Technology, Amazon.com Inc. is planting its flag in Boston.

The Seattle e-commerce and tech giant confirmed Wednesday that it plans to expand into the new Back Bay offices of WeWork Cos., which leases space to startups, freelancers, and outposts of larger companies.

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An Amazon spokeswoman declined to comment on any additional details about the WeWork lease, including the amount of space it is renting or how many workers will be located at the building. The company did say it will retain its Kendall Square office in Cambridge.

A person familiar with the deal said Amazon was leasing two floors at the WeWork location, on St. James Avenue between Arlington and Berkeley streets.

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The Globe reported in January that Amazon was on the hunt for 100,000 to 200,000 square feet of office space in downtown Boston, enough room for hundreds of employees.

The WeWork deal adds to Amazon’s already significant footprint in the Boston area and reflects shifts in the market for high-tech office space around the city.

Amazon currently leases about 171,000 square feet in Kendall Square, including 1½ floors the company added in August, according to county property records. Amazon’s Cambridge offices include a speech-science division working on the company’s Alexa voice-assistant products, a key part of Amazon’s efforts to sell its own personal technology devices.

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But commercial real estate in Kendall Square has become much more expensive in recent years as biotech and pharmaceutical headquarters have increasingly sprouted up. That has helped push many tech companies across the river into Boston, where rents can be cheaper.

“We have some technology companies here, but this is one of the world’s five or 10 largest technology companies,” said Brendan Carroll, head of Encompass Real Estate Strategy, which tracks Boston’s office market. “I think it’s an enormous statement for the city of Boston.”

Having WeWork as a landlord also could be attractive in its own right for a fast-growing company. WeWork typically offers more flexible terms than traditional corporate real estate managers, giving tenants the ability to add or shrink their footprint as hiring needs change.

WeWork opened the Back Bay location Feb. 1, part of a local expansion that includes another office in Cambridge’s Central Square, expected to open in a few weeks.

Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.
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