The start-ups fleeing Kendall’s high-priced real estate for Boston

Prahar Shah, founder of Mobee, talks about why he has pulled his company out of Kendall Square.
Prahar Shah, founder of Mobee, talks about why he has pulled his company out of Kendall Square.

Is Kendall Square becoming a victim of its own success? Small companies are fleeing sky-high rents for cheaper space in the heart of Boston.

The Globe ran a great, in-depth series today that looked at the issue from a variety of angles, with columnist Scott Kirsner leading off with an in-depth look at some of those who have left, and what is being done to keep innovation from leaving Kendall Square, where so much of it is developed in dorm roons and labs.

It has become such a concern that Cambridge passed a zoning ordinance mandating percentages of new developments be targeted at start-ups in exchange for the ability to build taller structures.

Advertisement - Continue Reading Below

“A year ago, it was rare for growing tech companies to land downtown, except for a few streets close to South Station,” Kirsner noted. “But now, the Thinking Cup Coffee Shop facing Boston Common is becoming the caffeination depot of choice, and a regular after-work gathering of mobile software developers has relocated to Quincy Market from Porter Square.”

He tells how Mobee was able to escape $30/square foot rents for $15/square foot for a penthouse office, thanks to decreasing prices as retail and related services pull back in downtown. And what a location: In an op-ed, Mobee founder Prahar Shah tells exactly where he landed his start-up:

“Mobee moved into the dome of Boston’s Old City Hall on School Street three months ago,” he writes. “There is something wonderfully symbolic and motivating about innovating in a historically significant building that has been transformed in function, yet withstood the test of time.”

And influx of pharmaceuticals and top-tier Internet players like Amazon, Google, Microsoft, and now Twitter are also helping push Kendall’s pricing up — and many start-ups out.

Not everyone is giving up on Kendall quite yet though.

Sebastian Castro, co-founder and chief operating officer of Leaf, said his payment processing start-up is still happy with being right in the middle of an amazingly concentrated pool of talent and early adopters.

“Kendall Square is the perfect microcosm for tech: a laboratory that allows companies to roll out products and test business models on the fly,” he wrote. “Kendall Square institutions like Aceituna Cafe and Voltage Coffee are known for being early tech adopters and were among the first companies to adopt Leaf’s payments tablet.”