Companies buying instead of renting
What happened
Across California, more firms are choosing to buy their office buildings as values hit cyclical lows, trading rent volatility for ownership and customization. The trend—most visible in Los Angeles but spreading regionally—is driven by discounted pricing, long-term stability goals, and the ability to tailor space for operational needs. That shift creates new buyer prospects among later-stage tech, professional services, and medical groups looking to lock occupancy costs and build equity. (latimes.com)
Why it matters
Apple and Nvidia have been among the busiest buyer-occupiers in the Bay Area: Apple paid roughly $350 million for a Sunnyvale campus and spent another $216 million on two Cupertino buildings in 2025. ( ) Nvidia closed multiple South Bay deals last year — including a roughly $123 million, 251,000-square-foot Santa Clara campus and smaller single-building buys — while Riot Games purchased its five-building Los Angeles campus for about $150 million, signaling tenant-led buying at scale. ( ) Industry trackers show the pattern is widespread: owner-occupier deals (where a tenant buys the building it uses, rather than a third-party investor buying to lease) made up roughly 20% of U.S. office sales in Q1 2025 and accounted for a much larger share of Bay Area volume in the first half of 2025. ( ) Why now: vacancy and distressed supply have pushed prices down and created visible discounts — public examples include the Gas Company Tower in downtown L.A., which sold for about $200 million after much higher pre‑pandemic valuations — and many leases and loans are rolling over in 2025–2027, giving tenants leverage to convert occupancy into ownership. ( ) Mechanics that matter for valuation and pitching: cap rate (the annual net operating income divided by purchase price, a shorthand for return) has widened in stressed office submarkets, making price discounts look larger versus hold‑period rent growth, and many large tech buyers used cash to accelerate closings — a credible comp set for occupier clients who can access similar liquidity. ( ) Tactical playbook for sourcing Bay Area owner-user deals: prioritize tenants with near-term lease expirations (CompStak and market reports show a concentration of Bay Area lease rollovers through 2026–2027), monitor county recorder filings and deed activity for assembly plays, and build outreach lists from the large tech leases pipeline (CBRE documented 14 of the largest 2025 U.S. office leases in the Bay Area) to target firms expanding footprint or those that raised late-stage capital. ( ) What to price and which assets to push: buyer-occupiers are competing especially for flexible, tech-ready campuses and Class B/C value-add buildings that can be refit for labs or dense compute rooms, so use recent owner-user comps from Apple and Nvidia to justify replacement-cost math and to model occupancy‑cost break-evens versus renewing a lease. ( )
Key numbers
- (latimes.com) Apple and Nvidia have been among the busiest buyer-occupiers in the Bay Area: Apple paid roughly $350 million for a Sunnyvale campus and spent another $216 million on two Cupertino buildings in 2025.
- ( ) Industry trackers show the pattern is widespread: owner-occupier deals (where a tenant buys the building it uses, rather than a third-party investor buying to lease) made up roughly 20% of U.S.
- office sales in Q1 2025 and accounted for a much larger share of Bay Area volume in the first half of 2025.
What happens next
- office leases in the Bay Area) to target firms expanding footprint or those that raised late-stage capital.
Sources
Quick answers
What happened in Companies buying instead of renting?
Across California, more firms are choosing to buy their office buildings as values hit cyclical lows, trading rent volatility for ownership and customization. The trend—most visible in Los Angeles but spreading regionally—is driven by discounted pricing, long-term stability goals, and the ability to tailor space for operational needs. That shift creates new buyer prospects among later-stage tech, professional services, and medical groups looking to lock occupancy costs and build equity. (latimes.com)
Why does Companies buying instead of renting matter?
Apple and Nvidia have been among the busiest buyer-occupiers in the Bay Area: Apple paid roughly $350 million for a Sunnyvale campus and spent another $216 million on two Cupertino buildings in 2025. ( ) Nvidia closed multiple South Bay deals last year — including a roughly $123 million, 251,000-square-foot Santa Clara campus and smaller single-building buys — while Riot Games purchased its five-building Los Angeles campus for about $150 million, signaling tenant-led buying at scale. ( ) Industry trackers show the pattern is widespread: owner-occupier deals (where a tenant buys the building it uses, rather than a third-party investor buying to lease) made up roughly 20% of U.S. office sales in Q1 2025 and accounted for a much larger share of Bay Area volume in the first half of 2025. ( ) Why now: vacancy and distressed supply have pushed prices down and created visible discounts — public examples include the Gas Company Tower in downtown L.A., which sold for about $200 million after much higher pre‑pandemic valuations — and many leases and loans are rolling over in 2025–2027, giving tenants leverage to convert occupancy into ownership. ( ) Mechanics that matter for valuation and pitching: cap rate (the annual net operating income divided by purchase price, a shorthand for return) has widened in stressed office submarkets, making price discounts look larger versus hold‑period rent growth, and many large tech buyers used cash to accelerate closings — a credible comp set for occupier clients who can access similar liquidity. ( ) Tactical playbook for sourcing Bay Area owner-user deals: prioritize tenants with near-term lease expirations (CompStak and market reports show a concentration of Bay Area lease rollovers through 2026–2027), monitor county recorder filings and deed activity for assembly plays, and build outreach lists from the large tech leases pipeline (CBRE documented 14 of the largest 2025 U.S. office leases in the Bay Area) to target firms expanding footprint or those that raised late-stage capital. ( ) What to price and which assets to push: buyer-occupiers are competing especially for flexible, tech-ready campuses and Class B/C value-add buildings that can be refit for labs or dense compute rooms, so use recent owner-user comps from Apple and Nvidia to justify replacement-cost math and to model occupancy‑cost break-evens versus renewing a lease. ( )
