Meta Pays a Lot of Money To Break Lease On London Office Building

"As a result of the move to working from home, Meta has walked away from one of its offices in London at the cost of 149 million pounds," writes Slashdot reader Bruce66423. The London Evening Standard reports: Meta paid the FTSE 250 developer 149 million pounds on Monday in order to break the lease on the building, 1 Triton Square. The tech firm, which also owns Instagram, let the space from 2021 following a refurbishment but never moved into the space. Meta has three open London sites including a neighbouring building in Regent's Place, near Warren Street in central London.

Analysts at BNP Paribas Exane claimed Meta has another 18 years on its lease at the site. British Land said it will receive the one-off payment to end the lease but the agreement would also reduce its earnings per share by 0.6% over the six months to next March.

Re:

[Can'tNot]

It said they started their lease in 2021 "following a refurbishment," which could very well mean that the deal was made before the pandemic. Things have changed since then.

Missing context

[Okian Warrior]

They bought out the lease? Suckers. Just borrow a page from the Elon Musk/Donald Trump playbook and stop paying them [businesstoday.in]. If you're big enough, accounts payable is a choice. Did someone forget to teach Zuckerberg that in business school?

Are you leaving out some important context?

I bet there's important missing context here.

Re:

[fropenn]

Are you leaving out some important context?

Yes, here's the context:
Meta is a stupid, horribly-managed company that frequently makes bad management decisions.

Re:

[crunchygranola]

The "brilliant" strategy of not paying your bills, or ignoring your contracts, is not a free ride. It may take awhile but it has serious consequences sooner or later - lenders refusing to lend you any money, businesses refusing to do business with you, lawsuits that you lose, etc.

In other news A New York judge ordered the dissolution of businesses owned by former President Donald Trump and his associates in a ruling Tuesday that found the ex-president and his company committed fraud [forbes.com].

Yeah, brilliant, brillia

In other news

[a7sharp9]

Meta pays 0.5% of quarterly revenue to break a lease.

Uh-oh

[Papaspud]

companies willing to pay big dollars to get out of leases doesn't bode well for real estate prices in many large cities right now.

Re:Uh-oh

[Shakrai]

It's not for nothing that city governments are trying to "encourage" employers to mandate return to work. It's particularly infuriating in cities like mine that are simultaneously seeking to impose congestion hour tolling, making it artificially expensive to commute to work, and for bonus points, dealing with a huge shortage of housing that could be somewhat alleviated by converting unused commercial space into residential.

Re:Uh-oh

[mjwx]

It's not for nothing that city governments are trying to "encourage" employers to mandate return to work. It's particularly infuriating in cities like mine that are simultaneously seeking to impose congestion hour tolling, making it artificially expensive to commute to work, and for bonus points, dealing with a huge shortage of housing that could be somewhat alleviated by converting unused commercial space into residential.

London already has that, a congestion charge, Ultra-Low Emissions Zone (ULEZ) and a housing shortage, demonstrating that despite that people want to live there.

London also has a good public transport system.

The problem is two-fold. People aren't wanting to commute into an office every day and companies are fleeing the UK due to Brexit. I expect this building will be turned into flats (apartments) that no-one can afford. That's all the rage in the UK at the moment, "build to rent".

Re:

[The-Ixian]

It's already expensive to commute to work in a major downtown area because of parking. The question is, how much more is your convenience worth to you? The park-and-ride is what most suburbanites do to avoid the cost.

Re:

[Austerity Empowers]

Let it burn.

Re:

[a5y]

Yup. Somes such as landlords are fatally parasitic once they've influence over a critical mass of property within a territory. Doesn't even matter if the business units stand empty, Louis Rossman has videos on YouTube covering years of it; contributed to him pulling his repair business out of NYC.

Reason for return to office

[khchung]

This is the real reason for the "return to office" mandates. Someone high up in management renewed the lease (or approved the renewal) during the pandemic, probably at a low price claiming huge potential "savings", and now do not want to admit they made a mistake and those "savings" were actually huge wastes.

Looks like finally someone had enough of paying for empty offices and did the right thing.

We just need to wait, as more leases come due and not renewed, there will be fewer and fewer seats in office to

Poor Touker

[magusxxx]

This will make it even harder for him to give his away.

How much was the rent?

[cowdung]

How much was the rent if 149M SAVED them money?

Re: How much was the rent?

[fintux]

Exactly. And the summary portrays this almost as if people working remotely caused Mera this big cost, while they actually did this as a cost saving measure that was enabled by people working remotely. The article does mention the cost saving measure, but even it manages to represent this as a cost induced by the fact that the office was left unused because of remote work.

The lease was for 18 years (maybe that eÃwas remaining, meaning the original one was 20 years). So the cost of breaking the lease eq

Re:

[Ed Tice]

The leas was for 1 Triton square which is 366k square feet. Assuming a cost of 50 pounds/ sq. ft. (which is awfully expensive but on the low-end for London) that would work out to 18.3 million per year. With 18 years left that would be 330 million dollars. So the lease breaking is about half the price. 366k square feet is huge. About half the size of an Amazon warehouse only those are located in cheap places and Amazon is assuredly not paying anywhere near that price for the lease.

Here is a Big Fat clue.

[echo123]

Here's a clue: Booking.com in Amsterdam consolidated about a dozen offices across Amsterdam into a single, large, purposeful building [at5.nl]. The article and video is in Dutch, with a written transcript, (that can be pasted into google translate if you want).

Translated, relevant clue:

Booking has signed a lease for 16 years and pays 2 million euros for rent every month.

FWIW, Amsterdam and also Frankfurt have only benefited from Brexit it seems IMHO.

Meta has three more open London sites .....????

[bsdetector101]

Meta has three more open London sites ....??? Does that mean they have 3 other buildings they are leasing and not doing anything with then ???? More wasted $$$ ??

breaking leases is difficult

[rahmrh]

I worked for a company that the rumor was that they broke their lease (1.5years into a 5 year lease) by purchasing the building, breaking the lease (easy since they were now the owner of both sides of the lease) and then selling the building at a loss. That transaction cost less than the pay out on the least to break the lease with the original owner.

Also in Austin

[602]

Meta has leased all or almost all of a 66 story tower under construction in downtown Austin. That tower is nearing completion and Meta has said that they don't need it. I believe they have paid for 10 years of occupation. They are looking for someone to buy that lease from them.