Summary
Amazon.com, Inc. (AMZN) filed an 8-K on December 21, 2007, to report on a significant real estate lease agreement. The company entered into agreements to lease approximately 800,000 square feet of corporate office space in Seattle, Washington, which is currently under development and expected to be completed in 2010 and 2011. This lease, with an initial term of up to 16 years, is a strategic move to consolidate its headquarters and accommodate future growth. The total cost for this initial space is approximately $700 million, covering rent, operating expenses, and tenant improvements.
Key Highlights
- 1Amazon has committed to leasing approximately 800,000 sq ft of new office space in Seattle, Washington.
- 2The new office space is expected to be completed and ready for occupancy in 2010 and 2011.
- 3The lease agreement has an initial term of up to 16 years.
- 4The total cost for the initial 800,000 sq ft is approximately $700 million, including rent, operating expenses, and tenant improvements.
- 5Amazon has an option to lease an additional approximately 800,000 sq ft for approximately $800 million.
- 6A termination fee of up to approximately $40 million may apply if Amazon decides not to occupy the additional space.
- 7This expansion is intended to consolidate Amazon's corporate headquarters and support long-term growth.
Frequently Asked Questions
The primary purpose of this 8-K filing is to inform investors about Amazon's significant lease agreement for new corporate office space in Seattle, Washington. This move is intended to consolidate headquarters and accommodate future growth.
The new office space is expected to be completed in 2010 and 2011. The initial lease term is up to 16 years.
The lease for the initial 800,000 sq ft will cost approximately $700 million over the term. Amazon also has an option for an additional 800,000 sq ft for about $800 million, with a potential termination fee of up to $40 million if the option is not exercised. These figures include rent, operating expenses, and tenant improvements.
Yes, Amazon has the option to lease an additional 800,000 sq ft and has further options for additional space, subject to certain conditions. However, electing not to occupy the additional 800,000 sq ft could incur a termination fee of up to approximately $40 million.