New businesses, stores alter Financial District
Tech, communications, health care companies — and bars and cafes — are changing the vibe
Working in Boston's Financial District used to mean something very specific. You wore a suit and carried a briefcase. You worked for a legal or financial services company. And when your work day ended, you went home — not out to eat at a nearby bar or restaurant.
But now those rules are changing.
A number of technology, communications, and health care companies are moving into the Financial District, shaking up the traditional mix of employees and business interests, while new restaurants, bars, and stores have opened, offering more reasons to linger after work.
"It's setting a completely different tone," said Bill Barrack, a managing director of Jones Lang LaSalle, a real estate services company with offices in the heart of the district. "We're getting a lot of companies that wouldn't even have considered the Financial District in the past."
Financial companies still occupy large swaths of real estate in the area. But new or incoming tenants include the Internet payment giant PayPal, the engineering business Technip, and Brightcove Inc., a digital media company that moved into 80,000 square feet at the base of the Atlantic Wharf tower. In 2012, those and other companies made commitments to fill nearly 700,000 square feet in the Financial District, helping it to recover rapidly from the recession.
In the last year, the district's vacancy rate has fallen to 11.9 percent, according to Jones Lang LaSalle. That marks a 4 percentage point decline during the year and the lowest vacancy level since early 2010.
Much of the activity is spilling over from hot markets such as the adjacent Innovation District and the Back Bay, where an influx of new companies has left little top-rated space available, causing those shopping for real estate to look harder at the Financial District.
The companies moving in are creating a more diverse business environment, with many more smaller companies in the mix, as opposed to a few financial behemoths taking up nearly all the space. It has gotten to the point where some real estate specialists are even talking about dispensing with the term Financial District in favor of something more encompassing, such as Waterfront Business District or Downtown Business District.
Several real estate specialists cited PayPal's new lease at International Place as the turning point.
"Basically, that helped change the brand of the whole market," said David Martel of the real estate services firm Cushman & Wakefield. He said PayPal's move will help draw interest from others who would not ordinarily look at the area.
Other incoming tenants include Partners HealthCare, the data storage company Iron Mountain Inc., and a digital advertising and communications company, Isobar. An Isobar executive said its move will help attract and retain employees who want easy access to public transportation and other city amenities.
"There are tons of restaurants and good places for our employees to hang out after work and be part of this community," said Darryl Gehly, US president of Isobar, which is moving employees from Watertown into offices at South Station. The company's new space also puts it near business partners and other technology and communications companies in the Innovation District.
"We want to be closer to our partners because it allows us to leverage a lot of different platforms and technologies to provide what our clients need," Gehly said. "We're also attracting a workforce that needs to have access to the city."
The changes in the Financial District have also brought new retailers and restaurants. The British prepared-foods store Pret A Manger recently opened at the renovated 50 Post Office Square (formerly 185 Franklin St.). The chef and owner of Les Zygomates in the Leather District is building a new restaurant, Society on High, at 99 High St. And Chiofaro Co., manager of International Place, has announced plans to open The Palm, a steak house that will have outdoor seating.
"Over the next decade, I think you're going to see more change in the Financial District than you will in the Back Bay," said Ted Oatis, a principal at Chiofaro Co., which sees more interest from technology companies since the PayPal lease.
"I do think you're going to see a shift to innovation-oriented companies," he said.