Sonos is latest tech firm to head to Downtown Crossing
The real estate story of Sonos Inc., a maker of slick, wireless hi-fi systems, starts with the kind of setting you might expect — four employees toiling in a cramped office in Cambridge’s tech-dominated Kendall Square.
But as the company grew, the story took an unusual turn.
Instead of expanding in Kendall Square with the Googles and Amazons of the world, Sonos recently signed a lease to move into 170,000 square feet in Lafayette City Center, a downtown Boston office complex that long served as back-office space for State Street Corp.
“Once we saw Lafayette, it was clear to me that it was the best place for us,” said Andrew Schulert, vice president of quality at Sonos, which employs 375 people.
What Schulert saw was a resurgent real estate market in Downtown Crossing, where hip technology companies are joining new retail shops, restaurants, and upscale residential buildings. The interest among tech firms has benefited downtown landlords who are trying to replace dated department stores and other tenants that have left the area.
“We’ve really been able to take advantage of a the complete transformation of downtown and the perception of downtown,” said David Epstein, president of the Abbey Group, which owns Lafayette City Center.
In addition to Sonos, Abbey Group has signed a lease with Carbonite, a maker of IT protection software for businesses that is expected to move into Lafayette City Center next month. That company will occupy about 53,000 square feet.
Danielle Sheer, vice president and general counsel for Carbonite, said she has not been around long enough to remember the old Combat Zone, a crime-infested collection of bars and strip clubs that once operated on streets near Lafayette City Center. Most of those businesses have been replaced by new restaurants and upscale residences.
“It feels like Tribeca in Manhattan now,” she said. “It’s gotten much cooler.”
Down the street, the advertising company Arnold Worldwide has moved into the former Filene’s department store at the corner of Washington and Summer streets, where 600 employees have brought a welcome burst of activity to the long-dormant property.
The property’s developer, Millennium Partners, is also building a 60-story condominium and retail tower that will create a new center of gravity in the district.
The area’s revival has occurred in fits and starts over the years, as it steadily attracted redevelopment activity. First it got new theaters, residences, and retail stores. Now, with the office market making a comeback, it is getting attention from a wide array of technology companies that are looking for alternatives to Kendall Square and Boston’s Innovation District. Many have been priced out of those areas or simply couldn’t find enough space to meet their needs.
Among the technology companies to move to the area recently are the online gaming company WorldWinner, digital marketer Localytics, and SS&C Technologies, a maker of software for financial services companies.
Sonos is by far the largest of those tenants. It will occupy two floors of the six-story building, with an option to expand in coming years. Schulert said the building offered easy access to the subway’s Red Line as well as the size and flexibility to accommodate a 50,000-square-foot hardware lab.
“We’re trying to retain and attract the best people, and providing a great environment will help us do that,” he said. “Kendall Square and the Innovation District are both great, but they are getting kind of full, and Downtown Crossing was just an obvious place for us to go.”