Meta pays £149M to break London office lease
ft.com
ft.com
They still act like they're swimming in billions upon billions, frittering $10's of said billions a year on GPUs and datacenter buildouts without a specific purpose or need, while simultaneously cutting back on perks, making the work environment more worker-hostile, eliminating fixed desk assignments, closing eateries, RTO, and doing layoffs.
Meta had another 18 years on its lease and paid the equivalent of about seven years of rent to get out of the obligation, according to BNP Paribas Exane analysts.Like, what? The landlord could fail to find another tenant for seven years and still come out ahead.
There are either draconian anti-subleasing provisions, or office rents have plummeted.
I guess its that having a lot of assets in a lower alpha sector will dilute the upside in a boom compared to a company that is totally leveraged to have all its value operating in the one sector. Fiscal madness.
Like, maybe I'd understand if the payments were due in a slow trickle over time, but article says that FB has already paid the full amount. This would compare to say, taking a small loss each month on the difference between the rent due and what a leasing manager could net from subleases.
(Though I guess 149m is a rounding error to FB.)
Most commercial leases are bespoke, and heavily favor the landlord. Meta being able to pay ONLY 7 years and break the lease speaks to their pricing power in the market place.
Most leases are triple net which means you have to pay for everything (insurance, maintenance, taxes, etc basically as if you owned the building without owning the building) and include no provisions for lease breaks (meaning you're liable for the full amount of the lease, usually all 20 years of it).
I wonder if things keep going that way, how will downtowns evolve and also how will humans, spending even more and more time in less social environments.
That's true for tech work regardless. Having said that, most remote workers do have a better social life from what i've seen. Many are even able to start a family - a luxury for tech workers.