Davis Square: A place where startups grow, but don’t always stay

Commuters at the Davis Square Red Line stop.Nicholas Pfosi for The Boston Globe/file

In many ways, Davis Square is a startup’s dream.

Thousands of highly educated young people live within a few minutes walk or bike ride. It’s a quick shot down the Red Line to Harvard, MIT, and Kendall Square. Coffee shops and cool bars abound amid old brick buildings.

But successful startups eventually need room to grow, and these days, that can be hard to find in Davis Square.

Just 1.6 percent of office space in the neighborhood is vacant, according to real estate firm Newmark Knight Frank. Davis has only two buildings larger than 50,000 square feet — which amounts to just a couple of floors in many downtown Boston buildings or in Kendall Square. The result: Startups often leave the neighborhood for bigger digs, and all those smart young people stream onto the Red Line to commute to work.

One of the driving factors behind the city’s new plan for Davis Square is a desire to change that. It calls for as much as 400,000 square feet of new office space (with room for 1,600 jobs), and replacing low-slung storefronts with four- to six-story buildings to give Somerville’s homegrown companies room to stretch.

“It’s great that companies start here. It’s a nurturing environment,” said Tom Galligani, Somerville’s director of economic development. “We want to be a community where companies can stay.”

Several notable startups have been born in Davis — and then outgrew it. Social media site Reddit spent its early days above a camera store on Elm Street, before being acquired and moving to San Francisco. Online pharmacy PillPack launched in Davis, before moving to a bigger office near Inman Square three years ago. (Last year, it was acquired by Amazon.) And music-tech startup The Echo Nest, founded in Davis in 2005 and later acquired by Spotify, just decamped this summer for downtown Boston and a 75,000-square-foot office — larger than anything that exists in its former neighborhood.

The young population, easy T access, and vibrant street life make Davis a great place to grow up, said longtime Echo Nest CEO Jim Lucchese. For a company in the music industry, the community of clubs and band-friendly bars made it even better, compared with, say, the more corporate Kendall Square.

“Davis is still a place where you can know the owners of businesses by their name,” he said. “And there’s always music.”

Commuters waited for buses at Davis Square Station in Somerville.Nic Antaya for The Boston Globe

Lucchese likes Davis so much that when he took over as CEO of London-based concert promoter Sofar Sounds earlier this year, he decided to locate its Boston office in the square. Rents had increased since The Echo Nest’s early days, but Lucchese found room for 10 people. When Sofar reaches 25 or 30 employees, he acknowledged, it might need to move.

And for the greater good, Lucchese might be fine with that. Yes, he said, it would be ideal if Davis offered more office space, but perhaps not at the cost of ruining what makes the square special — things like its reasonably priced restaurants, music clubs, and an intimate, street-level feel.

“I love it because it’s not a sea of glass and steel,” he said. “Its singular purpose is not the efficient delivery of office space. It’s a neighborhood.”