Where (and when) Big Government is Good

I just took a walk past South Station on my way to the South Street diner. Yes, it is 90 degrees but I need the burger.


South Station is more than a train station. It also houses over 120,000 square feet of Massachusetts government agencies. And the State is not the landlord. In total, all components of government--city, state, and federal--occupy over 3 million square feet of office space in privately-owned property in Boston. The government accounts for nearly 7% of the private office market. Including the space which the government owns, the total presence of government use in Boston exceeds 10 million square feet. The "multiplier effect" of the government is enormous as law firms, non-profits, unions, and everyone having business to do with the government tends to want to be near the government--big surprise, huh?


I am sure nobody is falling off their chair, marvelling at this unbelievable tidbit of worldly information. But the Boston office market might fall off its chair if Boston and Massachusetts were like any other major city state, or minor city and state in the country.


Consider these 10 cities:

1. Albany

2. Sacramento

3. Harrisburg

4. Springfield

5. Lansing

6. Olympia

7. Dover

8. Tallahassee

9. Annapolis

10. Salem



With the exception of Atlanta, there is no other city in a major state that is at the same time:

A) The largest city.

B) The business center of the State.

C) The cultural center of the State.

D) The educational center of the State.

E) The health care center of the State.

F) The nexus of all means of transportation, private and public.

G) THE CAPITAL


From my seat in the diner, I am looking back at the city skyline of which I can just pick up the Northeast edge. There are two 500,000 square foot towers to the far north and a beautiful, gleaming aluminum tower to the East. The first two are the JFK buildings of the Federal Government. The latter is the Federal Reserve Bank. Just these 3 buildings measure over 1.8 million square feet.


Let's look at what this means right now, in the streets. The EPA is looking for 250,000 square feet. The FBI is looking for 450,000 square feet. The Mass. Divisions of Insurance, Banking, and Affairs, and Telecommunictions are all in the market for a total of 150,000 square feet. The US Department of Education, at 75,000 will begin to consider options in the private market within one year.

Do you think Og Hunnewell at Nordic Properties likes Big Government? He just leased 140,000 square feet to the Mass. Division of Consumer Affairs at 1000 Washington Street, a former Teradyne manufacturing building Nordic renovated for office use less than a year ago.

Boston was founded in 1624. Its major business street came straight off Long Wharf where it became King's Street. After we threw the actual King out, it became State Street. It is still the primary business street in New England. As the city grew, every road, every rail line, every bus route had and still has one thing in common. They all lead to Boston.

All roads due indeed lead to Boston and, for the Boston office market, Big Government is a four letter word: RENT.