New leases give Apple a large footprint in Los Angeles for content push

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in iPod + iTunes + AppleTV
Apple has reportedly leased more than 200,000 square feet of prime real estate in Culver City, California to support its expanding efforts in original video content.




Apple has snapped up another 185,000 square feet of real estate in the center of Los Angeles's film scene, according to The Real Deal. The iPhone maker will take possession of a new four-story project at 8777 Washington Boulevard that was initially slated to become HBO's new headquarters.

The building includes 4,500 square feet of retail space on the ground floor, though it's not yet known whether Apple will occupy that space itself or look to lease it to a third party.

Apple's new office is minutes away from an 85,000-square-foot production facility the company has been linked to since last year, with reports saying that Apple has finalized the lease on that location as well.

Before beginning its video march, Apple acquired a significant presence in Culver City when it purchased Beats. The headphone maker opened a new campus just minutes away from Apple's new Washington Boulevard location in 2014.

Comments

  • Reply 1 of 15
    They should be buying up talent and studio space in Canada. Many “Hollywood” productions end up going to Canada anyway.
    jony0lolliverlkruppgregg thurman
  • Reply 2 of 15
    Good!

    I support Apple's efforts b/c I dislike big cable companies, telecom companies and media companies! :) 

    I don't mind paying more for content, but I want good value. Network television and most cable tv is the worst! The exception is Fareed's Zakaira's GPS on CNN. The best show on television. Mainly, b/c he doesn't rely solely on American pundits.

    Best

    Here's a thought, Apple should offer Fareed a mega salary to have him do his show for Apple. Woo, Bill Maher away from HBO, John Oliver, Vice, etc., etc. I have to believe Samantha Bee is grossly underpaid! :) Go with some known shows/personalities that are already working than gamble on new unproven shows. Or do both.

    edited January 18
  • Reply 3 of 15
    adm1adm1 Posts: 839member
    If they're truly in it for the long-haul, couldn't they BUY rather than LEASE? It's not like they're short of cash and if the plans didn't work out THEY could then lease the properties out bringing in more income. I always see renting as a short-term thing, doesn't make sense to me long-term unless they're planning on moving the team around regularly.
    SpamSandwich
  • Reply 4 of 15
    macxpressmacxpress Posts: 4,447member
    adm1 said:
    If they're truly in it for the long-haul, couldn't they BUY rather than LEASE? It's not like they're short of cash and if the plans didn't work out THEY could then lease the properties out bringing in more income. I always see renting as a short-term thing, doesn't make sense to me long-term unless they're planning on moving the team around regularly.
    I'm thinking more buildings are for lease than for sale. Its most likely pretty prime Realestate there. If you lease, you can just move elsewhere should you need a larger building or whatever else the reason may be. I'm sure they're not leasing with the intention of moving everyone back near Cupertino.
  • Reply 5 of 15
    lkrupplkrupp Posts: 6,091member
    Good!

    I support Apple's efforts b/c I dislike big cable companies, telecom companies and media companies! :) 

    I don't mind paying more for content, but I want good value. Network television and most cable tv is the worst! The exception is Fareed's Zakaira's GPS on CNN. The best show on television. Mainly, b/c he doesn't rely solely on American pundits.

    Best

    Here's a thought, Apple should offer Fareed a mega salary to have him do his show for Apple. Woo, Bill Maher away from HBO, John Oliver, Vice, etc., etc. I have to believe Samantha Bee is grossly underpaid! :) Go with some known shows/personalities that are already working than gamble on new unproven shows. Or do both.

    Blathering hypocrisy! When Apple does come out with content you’ll be the first one screaming bloody murder about the price.
    kingofsomewherehot
  • Reply 6 of 15
    adm1 said:
    If they're truly in it for the long-haul, couldn't they BUY rather than LEASE? It's not like they're short of cash and if the plans didn't work out THEY could then lease the properties out bringing in more income. I always see renting as a short-term thing, doesn't make sense to me long-term unless they're planning on moving the team around regularly.
    I don’t see the logic in leasing either.
  • Reply 7 of 15
    adm1 said:
    If they're truly in it for the long-haul, couldn't they BUY rather than LEASE? It's not like they're short of cash and if the plans didn't work out THEY could then lease the properties out bringing in more income. I always see renting as a short-term thing, doesn't make sense to me long-term unless they're planning on moving the team around regularly.
    I don’t see the logic in leasing either.
    In the overall scheme of things buying versus leasing isn’t that big a factor. Presumably the price (and location and availability, etc., etc.) was right for that building so they signed a lease. Was it a 3-year lease or a 10-year lease?  Who cares, I’m sure the people responsible did their due diligence and negotiated the best deal they could. Hopefully Tim Cook didn’t waste more than 10 minutes of his time thinking about this before signing off. 
  • Reply 8 of 15
    zoetmbzoetmb Posts: 2,292member
    adm1 said:
    If they're truly in it for the long-haul, couldn't they BUY rather than LEASE? It's not like they're short of cash and if the plans didn't work out THEY could then lease the properties out bringing in more income. I always see renting as a short-term thing, doesn't make sense to me long-term unless they're planning on moving the team around regularly.
    There are complex economics around both models.  I've seen companies buy or construct buildings and then sell them to a real estate company and lease them back.   There must be some tax advantages to doing that or maybe they just want the big cash infusion after spending it to construct a building or maybe they want to quickly pay back the building loan because the interest on the loan is too high.    Or it could be that even Apple sees it as a short term thing because they expect to expand and have to eventually leave that building anyway within a few years.   Or maybe they don't know if doing original production is going to be successful.   Maybe Apple is thinking about a future unified campus in southern California.   Or maybe Apple doesn't want to pay the real estate taxes, although if it's a triple-net lease, they'd have to pay them anyway.   

    In any case, I think Apple is pretty smart with their money (except perhaps when it comes to excessive costly design on their own buildings) and I'm sure they evaluated all the options.  I think it's a bit silly to second guess them on things like this.  

    I do think it's interesting that the building was supposed to be for HBO.   I wonder whether HBO walked or whether Apple offered more money and screwed HBO out of the building or ?
    SpamSandwichrandominternetperson
  • Reply 9 of 15
    fallenjtfallenjt Posts: 3,837member
    They should be buying up talent and studio space in Canada. Many “Hollywood” productions end up going to Canada anyway.
    screw Canada. Apple doesn't want to deal with "foreign tax" issue anymore.
  • Reply 10 of 15
    adm1 said:
    If they're truly in it for the long-haul, couldn't they BUY rather than LEASE? It's not like they're short of cash and if the plans didn't work out THEY could then lease the properties out bringing in more income. I always see renting as a short-term thing, doesn't make sense to me long-term unless they're planning on moving the team around regularly.
    In 1995, 8 years after I founded my firm, I purchased a 27,000 sq ft facility to accommodate my growth.  9/11 destroyed my income stream.  While I could cut costs all over the place to match revenue, I could not cut the debt payments.  In 2002 I shuttered the doors.

    I will never own a commercial property for my business again.
    randominternetperson
  • Reply 11 of 15
    boltsfan17boltsfan17 Posts: 1,905member
    fallenjt said:
    They should be buying up talent and studio space in Canada. Many “Hollywood” productions end up going to Canada anyway.
    screw Canada. Apple doesn't want to deal with "foreign tax" issue anymore.
    The whole reason Hollywood has been flocking to Canada are all the tax incentives and a favorable exchange rate. Canada also has top notch visual effects studios as well. It would be stupid for Apple not to consider filming shows in Canada. 
  • Reply 12 of 15
    adm1 said:
    If they're truly in it for the long-haul, couldn't they BUY rather than LEASE? It's not like they're short of cash and if the plans didn't work out THEY could then lease the properties out bringing in more income. I always see renting as a short-term thing, doesn't make sense to me long-term unless they're planning on moving the team around regularly.
    In 1995, 8 years after I founded my firm, I purchased a 27,000 sq ft facility to accommodate my growth.  9/11 destroyed my income stream.  While I could cut costs all over the place to match revenue, I could not cut the debt payments.  In 2002 I shuttered the doors.

    I will never own a commercial property for my business again.
    Wouldn’t you have still been locked into a lease term regardless of 9/11?
  • Reply 13 of 15
    nhtnht Posts: 4,175member
    adm1 said:
    If they're truly in it for the long-haul, couldn't they BUY rather than LEASE? It's not like they're short of cash and if the plans didn't work out THEY could then lease the properties out bringing in more income. I always see renting as a short-term thing, doesn't make sense to me long-term unless they're planning on moving the team around regularly.
    In 1995, 8 years after I founded my firm, I purchased a 27,000 sq ft facility to accommodate my growth.  9/11 destroyed my income stream.  While I could cut costs all over the place to match revenue, I could not cut the debt payments.  In 2002 I shuttered the doors.

    I will never own a commercial property for my business again.
    Wouldn’t you have still been locked into a lease term regardless of 9/11?
    Yes, but presumably with an intact revenue stream.  

    If you own property you can’t just break the lease for a penalty and walk away when revenue craters.  If the bank won’t work with you it turns out poorly.
  • Reply 14 of 15
    foggyhillfoggyhill Posts: 4,692member
    Matching rev stream to revenues and profit is why you lease. When your not sure how space you will eventually need leasing is particularly good.
    in this case , they need specialized space so buying options might be limited.
    randominternetperson
  • Reply 15 of 15
    nht said:
    adm1 said:
    If they're truly in it for the long-haul, couldn't they BUY rather than LEASE? It's not like they're short of cash and if the plans didn't work out THEY could then lease the properties out bringing in more income. I always see renting as a short-term thing, doesn't make sense to me long-term unless they're planning on moving the team around regularly.
    In 1995, 8 years after I founded my firm, I purchased a 27,000 sq ft facility to accommodate my growth.  9/11 destroyed my income stream.  While I could cut costs all over the place to match revenue, I could not cut the debt payments.  In 2002 I shuttered the doors.

    I will never own a commercial property for my business again.
    Wouldn’t you have still been locked into a lease term regardless of 9/11?
    Yes, but presumably with an intact revenue stream.  

    If you own property you can’t just break the lease for a penalty and walk away when revenue craters.  If the bank won’t work with you it turns out poorly.
    Regardless, sorry things didn't work out.
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