Kendall Square and the Innovation District may be the hip places to be, especially for tech companies, but a mini-revival of sorts is under way along America’s original technology highway.
The western suburbs around Route 128 are experiencing a building boom, with new headquarters for growing companies such as TripAdvisor and Vistaprint among five huge developments under construction in Needham, Waltham, and neighboring towns.
“We’re starting to see the pendulum swing back” from Cambridge and Boston, said Jon Varholak, a partner at Transwestern RBJ, a real estate brokerage.
The five new buildings alone would create more than 1 million square feet of office space. That follows a land rush over the past 12 months in which businesses moved into more than 1.5 million square feet of office space along Route 128, more than double the amount the previous year.
The attractions of the suburbs include much lower rents and lots of choices. Moreover, the workspaces — either new or newly renovated — are far from the souless corporate boxes of the 1980s that dotted the suburban landscape. The interiors of some new offices look as if they could comfortably fit along Seaport Boulevard in Boston or Broadway in Cambridge.
Explaining TripAdvisor’s decision to build in Needham, the company’s chief financial officer said, “We could offer amenities like free lunches, and workout facilities, and beers after work, and ping-pong tables, and outdoor space where our employees feed off of each other.”
The company’s building in Needham will have common spaces, a gym, and a cafeteria, and is located near walking trails and a pond — amenities the CFO, Julie Bradley, said TripAdvisor would have trouble getting in “sexy new South Boston.”
“We didn’t want just another glass corporate box,” said Bradley. “There’s an ‘aha’ moment, like, ‘This is a place I want to be.’”
There’s so much activity under way along the highway that the state government is even planning new ramps on and off Route 128 in Needham near TripAdvisor.
Indeed, some of the new construction is attributable to business tenants wanting fresh workspaces, said John Boyle, a principal at the real estate firm Cassidy Turley. Where the software companies of the 1980s may have been content with high-walled cubicles and harsh fluorescent lighting, businesses today want interior workspaces that encourage more interaction and boost morale, with in-office cafés and glass-walled conference rooms built into eco-friendly buildings.
“It is a dated, 30-year-old market out there,” Boyle said. “These bigger companies that are looking for quality space — it’s just not there.”
The office boom is also a huge opportunity for restaurants and retailers. In Waltham, the 1.2 million-square-foot shopping center called 1265 Main will open in phases. A Marshalls at the site opened its doors on Oct. 9, and a Market Basket is to follow in December. Several restaurants are also scheduled to open, although dates are not set.
And at CityPoint, a 25-acre office park off Exit 27 in Waltham, Boston Properties is adding two restaurants — Posto and Bonefish Grill — to complement the office complex it is constructing around the corner.
The startups and tech firms in Boston said the urban location makes it easier for them to hire promising grads fresh from MIT and Harvard and other top schools. But the suburban firms are recruiting from a different demographic, older professionals with more experience.
Lingping Gao, whose networking software company NetBrain recently moved into a new 55,000-square-foot office in Burlington, said his location is more central for the kind of highly skilled workers he’s trying to recruit.
“Our workers are 30, 35 years old,” he said. “Most people drive. There is a shuttle bus from where we are to the Alewife Station, but I’m not aware of any employees who use it.”
Boston’s Seaport District still leads the region in office construction, with 1 million square feet added this year and an additional 800,000 square feet under way.
And in Cambridge, a zoning change last year put plans in motion for 1 million square feet of new office, lab, and retail space.
That new space is pricey, though. The average rent for office space is $64 a square foot in Kendall Square and $57 in the Seaport District; and the best offices in those areas go for much more. Meanwhile, along the western end of 128, top-tier offices average $33 a square foot. And prices in the suburb are much more stable: in the past year, rents have gone up just 1 percent along Route 128, compared with 11.6 percent in the Seaport District, according to Transwestern RBJ.
Even though the vacany rate along the highway is higher, companies shopping for new offices have “a sense of urgency” and are eager to lock down a lease, said Bob Duffy, a principal at Duffy Properties.
Added Kevin Casey, who oversees construction and leasing at Hobbs Brook Management: “What we do have vacant doesn’t last long.”
His firm is building the headquarters for Vistaprint in Waltham and owns other properties along the highway.
Property developers have become so confident of the strength of the suburban market that some are constructing or redeveloping buildings “on spec,” meaning without tenants lined up to move in when construction is complete.
“We continue to be very bullish about Burlington,” said Scott Weiss, the vice president of development at the Gutierrez Co., a builder and property manager that has started construction of a 100,000-square-foot office building on spec.
Booms can easily turn into bubbles, but real estate specialists said the pace of development around Route 128 is proceeding at a safe pace. Indeed, Weiss said, Gutierrez is holding off developing another Burlington site, where it has permission to construct a 350,000-square-foot building, until it finds a major tenant to pre-lease the building.