Tight market conditions, rapidly rising rents and seemingly high barriers to entry are weighing on Boston-area tech companies. Many firms have been priced out of hot markets like Kendall Square and now the Seaport District, and available space in desirable locations is becoming increasingly harder to find. This outlook may seem challenging, but when pitted against similar top-tier cities around the country, Boston is more affordable than several other areas.
This infographic highlights several different data points, cost in particular, among major U.S. tech hubs. Where does Boston stack up? Findings include:
- VC Funding (2015): 4th with 10% of the U.S. total
- Tech Employment: 2nd with roughly 160,000 jobs
- Tech Wages: 4th at $118,800 per year
- Real Estate Costs/Employee: 6th at $6,010 per year
- Total Costs (Wages + Real Estate): 6th at $124,899 per year
- Top Submarket Rents: 4th at $60/SF in the Back Bay
Looking at the data, Boston is squarely in the “value” markets, with all-in costs per employee in line with Seattle and slightly below Washington D.C. Silicon Valley is arguably the deepest and most dynamic tech market in the country, but tenants have to pay a significant premium for both real estate and employee wages (70% more when compared to Boston). San Francisco isn’t much cheaper and Manhattan boasts some of the most expensive residential real estate prices in the country.
For tenants that want and/or need to operate in one of these key tech markets, Boston offers several cost advantages.