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Earlier this week, Bay Area Rapid Transit (BART), the screechy public transit system that serves the San Francisco metro area, announced a $227m plan to buy an office building of its own rather than pay a 60% rent increase that its landlord demanded.
So, rent prices are really that bad near San Francisco, huh?
Yes — the trend of buying buildings didn’t start with BART: A number of other businesses across the Bay Area have also bought their buildings in order to save big bucks.
Here’s how much a few of the biggest buyers have spent — in San Francisco alone — on their buildings:
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- Salesforce: $637m
- Juul: $397m
- Zynga: $228m
And in Silicon Valley, tech giants like Google, Facebook, and Apple have spent billions building their own corporate campuses.
Buying buildings is a good deal for businesses…
And not just because it helps them avoid paying rising rent costs.
Businesses that own their own buildings also have the added benefits of being able to brand their buildings, control security, and install giant, branded ball pits… ok, just kidding on that last one (… we think).
Companies can also make money by leasing out extra space to other tenants, or even flipping their buildings: Zynga sold the office it bought in San Francisco for $228m for a whopping $600m.