There goes another one. The law firm Finnegan, Henderson, Farabow, Garrett & Dunner is the latest business to join the exodus from East Cambridge to Boston’s growing Innovation District.
The firm that specializes in intellectual property law is taking up residence in Seaport Place, a 2.26 million-square-foot development at the center of the South Boston Waterfront’s transformation into a hub for high-tech companies and related services.
Finnegan is following other Cambridge businesses such as Buzzient Inc., a software company, and Brightcove Inc., a digital media firm, that both crossed the Charles. Zipcar Inc., the car-sharing company, plans on doing the same next year, and Cambridge’s Vertex Pharmaceuticals Inc. is building an $800 million headquarters on Boston’s Fan Pier.
“We were looking at the math, and it was too good to pass up,” said Michael R. McGurk, the managing partner for the local office of Finnegan, a global firm with headquarters in Washington, D.C. “We saved a significant amount of money moving into the Seaport area, compared with what we are paying in the Kendall Square area.”
The firm signed a 10-year lease for 33,000 square feet in part of the Seaport Place complex and will officially open there next week.
The string of recent departures from Cambridge is concerning, said Cambridge City Manager Robert Healy. “We want to be competitive, and I think we are competitive.”
But while firms like Finnegan and other technology companies have recently left, he said, other businesses are lining up for office or lab space in Cambridge. “We’ve got a ton of start-ups in Kendall Square that might burgeon into something big,” he said.
Indeed, Kendall Square remains one of the region’s hottest commercial real estate markets, with big technology companies such as Google Inc., Microsoft Corp., and Biogen Idec Inc. recently expanding in the neighborhood. Average asking rents have climbed 8.5 percent this year to $54.20 per square foot, according to commercial real estate firm Cassidy Turley FHO. The vacancy rate has dropped to 4.7 percent.
But as more companies leave Kendall Square for Boston’s Innovation District, rents are climbing there, too.
Rents at some of the premier properties have climbed to around $50 per square foot. And the area is getting crowded, too. The vacancy rate for class A business space in the area dropped to 11 percent from 25 percent this year.
“The Seaport has come a long way in terms of technology,” said Will Foley, commercial real estate agent at Cassidy Turley. “It was pretty quiet a few year ago.”
Now that the area has developed a critical mass of tech tenants, it is a must-see for any company that considers itself part of the innovation economy, said Foley. And even though inventory is shrinking, he said, it still offers more value than Kendall.
The newest business resident has Mayor Thomas M. Menino of Boston crowing about the Innovation District.
“Finnegan will be a great complement to the entrepreneurship ecosystem in the Innovation District,” Menino said. “This internationally known law firm is working to protect the next and greatest ideas and will have easy access to the innovators down the street who are collaborating to change the world.”
It was not just cost that lured Finnegan.
McGurk said most of his firm’s local competition is in Boston, and that the waterfront address will help it attract talent. Plus, he said, the new office is short walk from the John Joseph Moakley United States Courthouse.