Three interesting responds
NT: I wonder if that would ever be for sale. The condos above it I think were but didn't look much. The company will be land locked in that space as they can't expand up. Maybe they would grab more space below, but this location per the filing is more executive and administrative with a lot of the work done in Utah now.
txhockey: There are accountants on this board. I am not one, but if this is an operating lease, which is seems like it is, you are correct.
Advantages of an Operating Lease
There are many advantages to an operating lease as well:
Operating leases provide greater flexibility to companies as they can replace/update their equipment more often
No risk of obsolescence, as there is no transfer of ownership
Accounting for an operating lease is simpler
Lease payments are tax deductible
Firms in a lower tax bracket are more likely to classify a lease as an operating lease
https://corporatefinanceinstitute.com/resourc...ing-lease/
matzaball: Yes, that is what I found a while back and what I was getting at. I am familiar a bit with build outs and I know they are not cheap. When VERB was talking about moving to Newport I was thinking, maybe someone is moving out. Then when watching the Back to Basics Newport video and seeing the raw space, my mind jumped to, who is paying for all that because it won't be cheap.
Now everyone knows. The landlord.
Also, if it is 8,200 feet and not 4,900, that could be additional build out dollars. We will find out what the true space is. One could easily be the foot print and the other the usable space. Either number, VERB is expanding fast as you will see when I post later this week.
"We recently entered into a new lease to move and expand our corporate headquarters. The new lease is for approximately 4,900 square feet of new construction space, located at 2210 Newport Blvd., Suite 200, Newport Beach, California 92663, on the Balboa Peninsula (the “Lease”). The Lease is for a term of sixty-five (65) months, with the Company’s option to extend the Lease for either an additional twelve (12) or twenty-four (24) month term, upon written notice to the landlord. The Lease term will commence when the tenant improvements, paid for by the landlord, are substantially completed. The landlord is providing a tenant improvement allowance of $317,000 to build-out the space to our specifications. The average monthly base rent for the first twelve (12) months of the lease is approximately $12,000 after rent abatement . Thereafter, average monthly base rent will be approximately $24,000 over the sixty-five (65) months. As part of the lease consideration, signage of our logo “Verb” will be prominently displayed in three places on top of the two street facing exterior sides of the building."
NT: I wonder if that would ever be for sale. The condos above it I think were but didn't look much. The company will be land locked in that space as they can't expand up. Maybe they would grab more space below, but this location per the filing is more executive and administrative with a lot of the work done in Utah now.
txhockey: There are accountants on this board. I am not one, but if this is an operating lease, which is seems like it is, you are correct.
Advantages of an Operating Lease
There are many advantages to an operating lease as well:
Operating leases provide greater flexibility to companies as they can replace/update their equipment more often
No risk of obsolescence, as there is no transfer of ownership
Accounting for an operating lease is simpler
Lease payments are tax deductible
Firms in a lower tax bracket are more likely to classify a lease as an operating lease
https://corporatefinanceinstitute.com/resourc...ing-lease/
matzaball: Yes, that is what I found a while back and what I was getting at. I am familiar a bit with build outs and I know they are not cheap. When VERB was talking about moving to Newport I was thinking, maybe someone is moving out. Then when watching the Back to Basics Newport video and seeing the raw space, my mind jumped to, who is paying for all that because it won't be cheap.
Now everyone knows. The landlord.
Also, if it is 8,200 feet and not 4,900, that could be additional build out dollars. We will find out what the true space is. One could easily be the foot print and the other the usable space. Either number, VERB is expanding fast as you will see when I post later this week.
"We recently entered into a new lease to move and expand our corporate headquarters. The new lease is for approximately 4,900 square feet of new construction space, located at 2210 Newport Blvd., Suite 200, Newport Beach, California 92663, on the Balboa Peninsula (the “Lease”). The Lease is for a term of sixty-five (65) months, with the Company’s option to extend the Lease for either an additional twelve (12) or twenty-four (24) month term, upon written notice to the landlord. The Lease term will commence when the tenant improvements, paid for by the landlord, are substantially completed. The landlord is providing a tenant improvement allowance of $317,000 to build-out the space to our specifications. The average monthly base rent for the first twelve (12) months of the lease is approximately $12,000 after rent abatement . Thereafter, average monthly base rent will be approximately $24,000 over the sixty-five (65) months. As part of the lease consideration, signage of our logo “Verb” will be prominently displayed in three places on top of the two street facing exterior sides of the building."
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