we have a very boring, traditional, class A office space in a commercial district of town. it looks like a small law office, or an insurance sales office. no cubicles, just shared rooms and normal desks against walls.
it's quiet, and well lit, and cool. i can work an honest 8-10 hour day with occasional breaks without a problem. every full time employee (except interns) has a view. it's nice, but it's not "luxury" space. it's not very expensive, less than the cost of one junior employee.
i will never work in any other kind of environment ever again -- maybe a dedicated home office, but even then, i do like a (very) short commute for the same reasons you do. there are a handful of other tech companies here (it's mostly law firms, finance, psychiatrists, etc.) and they seem to have the same idea, and are doing well.
it's kind of like the black turtleneck theory -- the office is not something we think about, like at all, so that we're free to spend our mental energy on other more productive things.