"The idea is that there is a specific geographical area that all of these companies are trying to penetrate from a labor perspective," explains M&G senior vice president James F. McCaffrey. "California has Silicon Valley, North Carolina has the Research Triangle, and our thought was if you could brand [the Massachusetts high-tech region] a little bit, it would help define it better for everybody."
M&G is certainly doing its part, recently sending out a press kit that included T-shirts emblazoned with a logo reading "Boston's TechnoCorridor: Feel the Burn." The company's research department has kicked in with a report outlining vacancies, rental rates and recent trends in the region, information that will be produced on a regular schedule in the future. Loosely defined, the TechnoCorridor is a 50-square-mile swath that runs north along Interstate 93 to the New Hampshire border, southwest on Route 495 to Westborough, and east on Route 9 into Boston and Cambridge.
Whether the name will catch on is uncertain, but even M&G's competitors acknowledge there is a specific market where the state's technology firms strive to locate. Joseph Fallon of Trammell Crow notes that computer makers dominated much of the region in the 1970s and 1980s before the market crashed. "That's definitely where the lion's share of technology-based companies are located," says Fallon. "It's been that way for 20 years."
The advent of corporate campuses has helped add to the concept, with such firms as 3Com, Sun Microsystems and Oracle having established multi-building complexes throughout the TechnoCorridor since 1997. Overall, M&G estimates that firms have committed to more than 15 million sf of existing space and land sites in the past few years, totaling more than $3 billion of total real estate investment there.
Meanwhile, the lack of new supply, coupled with a no-holds-barred mentality among the well-capitalized companies, has driven rents up dramatically. While still about half the cost of Silicon Valley, McCaffrey says rents in the TechnoCorridor have increased by 40% to 60% this year alone, and M&G is predicting that they will rise even faster by year's end. There is currently about seven million sf of demand chasing 1.5 million sf of supply, McCaffrey says.
"The relief valve you've traditionally had out on Route 495 is not there anymore. "Right now, it's not a question of what the space costs, but whether you are going to find the space at all, and that is having an incredible [impact] on rents," he notes.
As for the TechnoCorridor label, McCaffrey says he has recently heard brokers from other firms using the term, adding that he believes it would help give the Massachusetts high-tech industry a lift were it to take hold. "I think it's starting to have a little cache," he says.
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