Why do companies rent and have separate landlords?



Companies have to demonstrate profits to their shareholders quarterly and annually. Holding property and making payments related to owning and maintaining the property simply show as capital expense that work negatively toward their profits.

On the other hand, when the company leases a property, 1) their lease payments often includes costs of property management enabling them to focus on their business purposes (and less on maintenance of real estate). 2) Their lease payments are operational expenses, which demonstrate greater profits to shareholders (increasing company stock prices).

Therefore, corporations need people like you and me that will take their responsibility to maintain properties off their hands and collect rent payments.

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