It’s no secret that Boston is one of the hottest areas for start-ups. As we’ve written in the past, Downtown Crossing is particularly attractive, largely because of the great value it offers. The price per square foot is as much as $20 less expensive in Downtown Crossing than in Cambridge, with deals to be found in the high $20s to low $30s. But while Boston is less expensive than its neighbor on the other side of the river, that doesn’t make it cheap. Startups, which have limited resources, are always looking for a great space that will serve their greatest needs – access to resources and attracting top talent.
Trying to pin down the best value for office space in Boston these days is like trying to hit a moving target. Boston is a small city that, with the exception of the Seaport district, does not have much room to grow. So what is a start-up looking for a good value supposed to do? The answer lies in longstanding, established landlords.
Long established landlords who stayed on the sidelines during the flurry of transactional activity over the last few years face almost no pressure from new investors coming in and demanding returns, which means lower rents. A thorough search can produce landlords who can offer quality space at a good price for startups looking to move into the city. And if startup tenants hold access to transit as a priority, the type of space becomes less important, meaning low-rise class A and class B office space become viable options at a good price.
Another benefit that landlords with closely held buildings offer is lease flexibility, which is advantageous to both parties. A startup has aspirations to grow and therefore only looks into the future two years tops. For the landlord, a shorter lease agreement favors them due to the rising market right now; their real estate is going to continue to rise in value when the startup tenant decides to move on.
The notion of flexibility also extends to the type of space as well. Class A low-rise or class B office space in the city tends more creative brick and beam space, with high ceilings where tenants can find their own identity.
A good example of such a landlord is Roger Berman, who owns 186 South Street in Boston. He is a longstanding owner who understands the needs of the startup tenant, drawing from experiences in the last tech boom. He offers his tenants short term leases (normally around 2-5 years) at market rate with flexible options that account for growth or downsizing. It was this approach that has brought many startups and tech firms to his building, notably San Francisco-based Uber, which signed a 3,201-square-foot lease back in January.
In the startup world, building strong relationships is paramount for success – with business partners, investors, employees and when it comes to Boston – a landlord. Moving to the right location to grow a business may seem expensive, but meeting the right landlord with proven experience can make all the difference, and puts the startup’s focus back on what matters.