Summary
Palo Alto Networks (PANW) filed an 8-K on August 19, 2015, to report on a significant expansion of its lease agreement. The company entered into an expansion notice for a new approximately 300,000 rentable square foot building, identified as Building G, located in Santa Clara, California. This expansion is a testament to the company's growth and its need for increased operational space. The terms of the new lease for Building G include a 124-month term commencing about nine months after construction completion. Notably, the base monthly rent will be fully abated for the first 28 months of the lease term. Following this abatement period, the rent will align with the company's existing lease rates. The landlord will bear the cost for the building's core and shell construction and will provide a tenant improvement allowance of up to $60 per rentable square foot, offering substantial support for PANW's internal build-out.
Key Highlights
- 1Palo Alto Networks is significantly expanding its physical footprint with a new ~300,000 sq ft building (Building G) in Santa Clara.
- 2The expansion is an exercise of an option within an existing lease agreement with Santa Clara Campus Property Owner I LLC.
- 3The new lease for Building G is for a term of approximately 124 months.
- 4A substantial rent abatement of 28 months will be provided for the base monthly rent on Building G.
- 5The landlord will cover the costs for constructing the core and shell of Building G.
- 6Palo Alto Networks will receive a tenant improvement allowance of up to $60 per rentable square foot for initial improvements.