What profit a square to gain Google but lose its internal soul? That is very well the question facing Kendall Square as its success makes it increasingly too expensive for the start-ups that turned it into the tech and life sciences hub that doesn't sleep.
The area's commercial rents have climbed into the mid-$40s a square foot on average, well ahead of those in other Hub hubs for technology and biotechnology like Boston's Innovation District. This rise in rents, a response by landlords to what the market will bear in a gradually more desirable location, has begun to push out the very start-ups that made Kendall Square desirable in the first place. Take this example, per Michael B. Farrell in The Globe:
When Ben Carcio’s idea for a Web start-up won a national competition last year, the prize included free office space at a dream address for techies: Kendall Square. He was surrounded by engineers from Microsoft Corp. and Google Inc., and the venture capitalists who fund young tech companies. But when his year of free space ran out, Carcio found he could not afford Kendall Square’s soaring rents and last month moved his company, Promoboxx, to the South End in Boston.
The South End? Ouch. Now, Kendall Square isn't in danger of seeing an exodus of companies. The area has one of the lowest commercial vacancy rates in the nation, 5 percent, low enough to rival those in Midtown Manhattan or Washington, D.C. But that's kind of the point: Only big firms like Google, which the square retained last month by letting the giant expand at 4 and 5 Cambridge Center, will be able to afford the rents in the near- and long-term. Everyone else will split. Which, ironically enough, will seed other hubs that then become the next Kendall Square. Cycle of life, sunrise, sunset.
· Start-Ups Squeezed Out of Kendall Square [Globe]
· A Day in the Life of Kendall Square: Lobster and Smartphones [Curbed Boston]