Business Context and Reporting Period
Company: Paylocity Holding Corp
Filing Type: Form 8-K (Current Report)
Date of Report: June 1, 2016
Event: Entry into a Material Definitive Agreement for a new corporate headquarters.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt, or liquidity metrics. It details a specific lease agreement with the following financial terms:
- Lease Size: Approximately 309,559 rentable square feet.
- Location: 1400 American Lane, Schaumburg, Illinois.
- Base Rent: Approximately $15.00 per rentable square foot for the first 12 months of the Term.
- Rent Escalation: 2.5% increase annually after the first year.
- Rent Abatement: Landlord provides abatement of base rent for the initial 12-month period after the commencement date of each phase.
- Operating Expenses: Company is responsible for its proportionate share; not included in base rent.
Material Changes and Lease Terms
The Company is replacing its current headquarters in Arlington Heights, Illinois (lease expiring end of fiscal 2019) with a new facility in Schaumburg. The lease structure includes:
- Phased Commencement:
- Phase I: June 1, 2017
- Phase II: November 1, 2017
- Phase III: July 1, 2018
- Phase IV: July 1, 2019
- Lease Term: 180 full calendar months (15 years) beginning on the Phase I commencement date, ending 180 months after Phase II delivery (expected November 1, 2017).
- Renewals: Two five-year renewal options.
- Flexibility: Includes termination, contraction, expansion, right of first offer, and right of first refusal options.
Guidance, Outlook, and Risks
Management Commentary: The filing serves to disclose the execution of the lease agreement and incorporates a press release (Exhibit 99.1) for further details. No specific financial guidance or outlook is provided in this text.
Risks and Contingencies:
- Actual commencement dates are subject to the timely delivery of the premises by the Landlord.
- The summary provided in the filing is not complete and is qualified by the full text of the Lease Agreement (Exhibit 10.1).
Investor Verification Checklist
- Review Exhibit 10.1 (Multi-Tenant Office Lease Agreement) for complete terms, including specific definitions of operating expenses and termination penalties.
- Verify the impact of the phased move on capital expenditures and cash flow in future quarterly reports.
- Confirm the status of the current Arlington Heights lease and any potential early termination costs or sublease opportunities.
- Monitor the actual delivery dates of the Schaumburg premises against the expected schedule to assess potential delays.