[chimtim]

1) managing an office building is a lot of hassle.

2) startups are always growing or shrinking. no point putting so much significant capital unless it is an established in for a long haul at a location where talent is surplus.

3) if you indeed have that much capital, you can pretty much dictate what you want and get some tax benefits (amazon, second HQ) or work with a city build a new building suitable for your long-term needs (apple).

4) not much inventory that meets your needs in SF market because the property prices are always going up.

5) the leasing company actually has limited leverage. finding another tenant esp. the size of dropbox is not easy. you can bin pack other tenants but you lose lot of money until all new tenants move in.

[morganvachon]

"the leasing company actually has limited leverage"

This can be true even at the SMB level. My employer sees only a couple of million in revenue yearly, we lease our warehouse/office space and we have more or less free reign to make any non-structural changes. If we decide to clear out a corner of the warehouse to put in more office space, we can (and we have). We just have to pay for the materials and labor. We've actually had our lease renewed on better terms over the years for being good tenants.

[IgorPartola]

The ability to modify stuff structurally (which isn’t really structurally but rather just the non-load bearing walls) is pretty standard in commercial leasing. Your employer isn’t getting anything special.

[jjoonathan]

Yes, because even a SMB has a lot of leverage compared to, say, a residential leasee. I believe that was the point.

[dx034]

It's more the duration of the lease. If you'd rent a house on a fixed contract for 10 years, landlords would also allow changes under the condition that they're reversed at the end.

Interestingly that's exactly the case in Germany. Home ownership there is one of the lowest in the world so that tenants stay in one place for longer. It's normal for tenants to change apartments as they like during the tenancy. Landlords don't care as long as it's in a good state at the end of the tenancy.

[ozi]

More simply, commercial spaces usually come empty, and the tenant is required to handle "fit and finish."

[deelowe]

Not only that, but the tenant is responsible for all maintenance and repairs.

[icelancer]

This is absolutely not the case in my buildings for our SMB that is in the single digit millions in revenue. We can make changes to non-load bearing structures and we are not on the hook for maintenance or repairs on the building.

[deelowe]

Is it a shared building? For the type of building the op was talking about (e.g. single tenant industrial warehouse) it's typically the tenant who handles maintenance.

[ksec]

It sort of depends. In most places on earth trying to keep the property leased is the basic principle. But Chinese has a funny culture where they would rather have it empty then to lower its prices, and even for a long period of time.

[tome]

> 1) managing an office building is a lot of hassle.

Well yeah, but you can still pay someone else to do it, even if you own the property.

[mljoe]

Want to also add something about the tax situation with renting vs buying as a business. If a company is focused on owning and profiting from real estate, they can become a "Real Estate Investment Trust" (REIT), which get special tax treatment.

[mjcl]

Focused has to mean really focused ... REITs need to make 75% of their income from rents and 95% of their income from rents, dividends and gains from securities sales. Income from other sources is referred to as 'bad income' and is carefully watched.

[santaclaus]

> startups

Dropbox is a decade old, at this point...

[kayoone]

this. At >1Bn revenue and >1000 employees we shouldn't use the term startup anymore.