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SpaceX land in Hawthorne sold to investor

Discussion in 'SpaceX' started by rage_777, Aug 6, 2014.

  1. rage_777

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  2. Owner

    Owner Active Member

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    Up here in Silicon Valley, most but not all companies rent / lease.

    Part of it is that companies aren't that large and don't want to invest in land and buildings. Also as companies grown their space needs change a lot.
     
  3. stephenpace

    stephenpace VIN S00219

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    Not just Silicon Valley. I worked many years for a global company that owned many of the buildings we were in, but over time, the company sold them and leased them back. It gets the capital off your books and turns a capital expense into an operational one. It helps your return on capital employed.
     
  4. Doug_G

    Doug_G Lead Moderator

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    A lot of the local high tech companies here did that as well. It's a very common strategy.
     
  5. Teriyaki88

    Teriyaki88 Member

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    I can think of hundreds of reason why. Here's a couple.

    Maybe they don't want to show debt/long term liability on the company's balance sheet.
    I'm not saying there's an issue but maybe there's environmental/clean up problem with the property.
    Maybe LA/CA location doesn't have tax incentive compared to other states.
    Maybe they don't think the facility doesn't meet their long term growth plans.
    Maybe the eventual buyer was willing to pay more than what Space X was willing to pay.
    Maybe they want to move Space X to somewhere near The Giga Factory.

    You get the idea :)



     
  6. NigelM

    NigelM Recovering Member

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    Leveraging assets and maximizing cash flow.
     
  7. rage_777

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    I guess my company is just different from everybody else. We leased lots of buildings when times were good, but when the recession hit they moved everybody from the leased buildings to the buildings that they owned (and the land under it). I also saw this with other companies in the industry.
     
  8. Grendal

    Grendal Active Member

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    The article does mention that SpaceX has a lease through 2023. By then, the company will be so huge they will probably be expanding into a larger facility anyway. Then Elon can negotiate with California for a sweetheart tax deal like he's doing with the gigafactory. Elon knows how to leverage his strengths well. He just finalized the deal with Brownsville TX to open the first orbital spaceport. Here in New Mexico we already have Spaceport America for suborbital flights with Virgin Galactic.
     
  9. Cosmacelf

    Cosmacelf Active Member

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    Do note that SpaceX is still a private company, meaning that it doesn't have oodles of cash to throw around. I'm pretty sure they have other more productive uses for $45M.
     

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