Dropbox's Crazy Leases

SAN FRANCISCO—Cloud storage company Dropbox needed more space, which was bound to happen with all the spreadsheets and cat videos you've been sharing online. Its two new leases in San Francisco's SoMa district total 280k SF—next door to each other, with competing landlords.

On Wednesday, Dropbox inked a 100k SF lease at 345 Brannan, tacking on additional space to the 180k SF it signed at 333 Brannan last Friday. While developer Breevast's 345 (rendered above) is trailing developer Kilroy Realty Corp's 333 by a couple of months due to site permits, it's smaller and will catch up to deliver at the same time for spring 2015 occupancy. The buildings will stand about a foot apart and be connected by underground tunnels (perfect for lazy hackers who like to just sneak in on foot), we learned from a source connected to the deal.

When our source first heard about Dropbox's plan four or five months ago, he admits it sounded completely crazy. Could Kilroy (its CEO John Kilroy Jr., above) and Breevast really jump into bed together for their mutual benefit? It's the first time our source has done a deal where a tenant wanted to move into two neighboring buildings with different landlords that are "healthy competitors." (Is it too late for Nobel Peace Prize nominations?) The fact is that everyone wants to be in the SoMa neighborhood; that's where the young workforce wants to live and bike to work. Pinterest also wanted 333, but didn't get to the plate quickly enough, he adds. It wasn't just about the landlord, but Dropbox being on its game, too.

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