Fred Shilmover needed office space, and plenty of it. Since moving into a 15,000-square-foot office in June 2014, the chief executive of InsightSquared had doubled his staff and raised an additional $13.5 million in venture capital.
That meant one thing for Shilmover’s software startup: Goodbye, Kendall Square. This fall, it will join the parade of tech companies that have crossed the river into Boston after outgrowing Cambridge’s epicenter of innovation.
The biotech boom has been very good for the formerly industrial neighborhood in MIT’s back yard, as the ubiquitous construction crews can attest. But it also means that expanding companies find little room to maneuver.
“If they want to grow at all, they pretty much have to leave,” said Lisa Strope, a researcher for real estate broker Jones Lang Lasalle.
Top-tier office space in Kendall Square now rents for more than $70 per square foot, having grown more than 11 percent in the past year, according to research from the real estate broker Transwestern. Comparable space costs less than $60 in Boston’s Back Bay, where rent climbed only 1 percent.
That’s where InsightSquared ultimately signed a lease, for a new office at 4 Copley Place that is three times the size of the Kendall Square headquarters.
Shilmover, whose company sells data-analysis software for sales teams, said he is impressed by the increasing number of tech startups that have found homes in Boston. “There’s a much more vibrant startup community now,” he said.
That’s the kind of thing Boston officials like to hear — and they hope to keep the momentum going by providing more help to companies that cross the Charles River.
Rory Cuddyer, City Hall’s “startup czar,” set up a meeting with InsightSquared and Boston’s economic development chief, John Barros, after the company sent word that it was thinking of moving. “We said, ‘If you decide to come here, consider us an ally. We’ll be as helpful as possible,’” Cuddyer said.
Although the Back Bay may not be synonymous with tech entrepreneurship, InsightSquared’s move illustrates the more recent trend of startups sprinkling themselves wherever they can find affordable space in a booming real estate market.
Strope said the older concept of one or two startup-heavy neighborhoods has dissolved in recent years, despite the surge of construction in Kendall Square and Boston’s attempts to remake the Seaport as an Innovation District.
“We’ve been calling it the swirl effect, once tenants are out of Cambridge and looking around,” Strope said. “There are the ones that go to the northwest, to Burlington and Lexington. Some come downtown. Some go to the Seaport.”
The name of the neighborhood really didn’t matter for Shilmover’s company, as long as transportation and other practical concerns were addressed, he said.
“What’s important is what’s convenient for our team, where we can recruit top talent and where we can find a space that meets our needs,” he said. “Whether it’s next to 10 other startups or not, I think, is less important.”