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Why Tech Companies Are Choosing Boston Over The Suburbs

The New Balance building at Boston Landing is seen in Jun 2015. (Jesse Costa/WBUR)MoreCloseclosemore
The New Balance building at Boston Landing is seen in Jun 2015. (Jesse Costa/WBUR)

Bose is the latest suburban business heading to Boston. The audio equipment company announced last week it will move part of its operation from Framingham to Boston Landing in Brighton (that's the site of the New Balance campus).

"We chose Boston Landing because it provides our employees with a desirable work location that's easy to access by public transportation and the highway," Joanne Berthiaume, a Bose spokeswoman, said in an emailed statement.

The company says it does not yet have information to disclose on the specific office plans or number of employees who will be in working in Boston, but insists the company as a whole won't relocate; Bose headquarters will remain in Framingham.

Still, the move signals a broader trend. There's a long list of companies that in recent years have said goodbye to cloistered suburban campuses and opted for city living, including Reebok, PTC, Autodesk, Converse and LogMeIn. Plus, of course, GE, which left the Connecticut suburb of Fairfield for Boston's Seaport.

Based on interviews with company executives, there seem to be three main factors that have led to the pendulum shift in corporate lifestyle: access to talent, public transportation and a collaborative open-source culture.

"There's a whole generation in the technology workforce [who are] in their 20s and early 30s, and they live in urban areas. Many of them don't have cars, [they] walk to work, ride the subway to work," said Ben Hicks, who leads the software technology division at the recruiting firm WinterWyman in Waltham. "And you put yourself at a big disadvantage if you're in Framingham, as Bose is, or you're in Burlington or Andover."

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Hicks' company helps find tech talent for roughly 200 to 300 companies in the Boston area, and it also tracks those hires by geography.

"For this past year, for the jobs we worked on," he said, "40 percent were in downtown Boston, 22 percent were in Cambridge -- generally that means Kendall Square."

That means Boston and Cambridge alone accounted for over 60 percent of all its tech job hires in the last year.

As a comparison, Hicks points out that two decades ago, when he first joined WinterWyman, only about 5 percent of tech hires were in the urban core of Boston.

Route 128 was the innovation highway, but over time as millennial workers chose the city, companies have followed.

One of the earlier trendsetters was LogMeIn. The company relocated from its Woburn headquarters to Boston's Seaport in 2013.

"A good chunk of our employees are either walking to work or biking to work," said Dena Upton, vice president of people and talent at LogMeIn. "[And] a lot of our employees are taking advantage of public transportation to get in here."

Upton said it was nearly impossible to visit the company's old Woburn headquarters without a car.

Plus, she insists there's an energy in Boston that the company didn't feel before. The innovation ecosystem around the Seaport has only expanded in the last few years with more companies moving into the neighborhood.

One of those companies is PTC. It's currently based in Needham, but the software company is building a new headquarters in the Seaport, and planning to move into the area by early 2019.

"We are in a very competitive marketplace in the software industry," said Eric Snow, PTC's senior vice president of corporate communications. "And we believe that being in an urban location will assist [us] with both attracting new employees we're looking for, as well as giving existing employees a reason to stick around."

But beyond talent, some companies say being in Boston is critical for corporate culture.

Earlier this fall, Reebok began moving its 700 employees from a massive 60-plus-acre campus with soccer fields in Canton into a new office on the edge of Boston's Seaport.

"Companies are realizing how interconnected they are to other businesses, and the need to be more collaborative," said Matt O'Toole, president of Reebok Brand. "I think it's difficult to do that in a more cloistered environment."

And he candidly points out his competitors are also based in Boston. Both New Balance and Converse have headquarters in Boston, and these sneaker companies feed off one another.

In fact, many company executives say the tech space itself is more collaborative than it was 20 years ago, which is why businesses as survival strategy don't want to be as insulated or insular as they once were.

Tech companies in the city routinely host meetups where young talent from a range of companies share ideas, and Upton, with LogMeIn, says her company is able to do that more effectively in Boston.

"You want to attract people to come in to your facility, to give back to the overall tech community," she said. "It would have been much more difficult for us to attract people to come to our space if we were out in Woburn."

There are a few other reasons for moving: Upton points out that lifestyle and food options are just so much tastier.

When the company was at an office park in Woburn, she said people had to hop in a car and drive under a highway any time they wanted to go out to lunch.

"Here there's tons of different places to just walk out, get out of the office after work, and meet up with other people," she said.

Access to food, the airport and public transportation are all major selling points, but as more companies have moved back into the city, rents have skyrocketed.

"Affordable real estate in the city, because of the movement into the city in the last five years, has become harder to come by and more expensive," said Hicks, with WinterWyman. "Because so much of the tech hiring is small companies and startups, they have a defined budget, they can't go out and have the most expensive or the fanciest office space. So I think that's where we've seen it level out a little bit."

Hicks points out that even though tech hiring in Boston is strong, it's not as high as what his company witnessed a couple of years ago. In 2015, over 50 percent of the tech jobs WinterWyman hired for were in Boston.

And so it's a tricky balance because as more companies are lured back into the city, rents will inevitably rise, pushing out smaller startups and midsize companies that can't afford Boston's cost of living.

Plus, not everyone at a company wants to pay thousands of dollars in rent for an apartment or commute into downtown Boston.

And so perhaps we'll see more hybrid moves, like TripAdvisor. The company chose to build its new headquarters a couple years ago not in Boston but in Needham — where suburban executives could drive in and urban commuters could hop on a TripAdvisor shuttle from North Station or Cambridge.

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Asma Khalid Twitter Reporter
Asma Khalid formerly led WBUR's BostonomiX, a biz/tech team covering the innovation economy.

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