Law firm office leases signal rebound as leaders think long-term - Reuters
The company and law firm names shown above are generated automatically based on the text of the article. We are improving this feature as we continue to test and develop in beta. We welcome feedback, which you can provide using the feedback tab on the right of the page.
(Reuters) - Law firm leasing activity in major U.S. markets rose in the third quarter of 2021, a new report from global property agent Savills Inc said, suggesting a gradual rebound in the law firm real estate market more than 18 months into the COVID-19 pandemic.
The report, released Monday, found law firms occupying more than 20,000 square feet leased a combined 2.1 million square feet in Q3 2021. That's a 51% uptick from Q2, when Savills tracked 1.4 million square feet of leased space.
Large law firms leased 5.4 million square feet in major markets in 2020, a 37% drop from 2019, Savills said earlier this year.
"It’s definitely not 'recovery mode' just yet," Sarah Dreyer, vice president and the head of Savills' Americas research, said of the third-quarter results. "It's the earliest indication that law firms are wanting to re-engage in real estate planning, and that they feel comfortable making longer-term lease commitments than they had earlier in the pandemic."
Dreyer added that major expansions and renewals that firms inked in Q3 were made on a long-term basis of at least 10 years.
A major driver of Q3's leasing activity was Kirkland & Ellis, which announced in August it was moving out of its current Chicago office at 300 N. LaSalle to a 600,000 square-foot office space in the new tower being built about a half mile away at 333 Wolf Point Plaza.
Given its size, the move accounted for a big slice of the recent leasing activity in Chicago, which saw its volume of leased space quadruple between Q2 and Q3, Dreyer said. But Dreyer said her assessment that the national market has thawed still holds.
"I don’t think it’s skewing the trend," Dreyer said.
New York saw a 92% increase in law firm leasing volume between Q2 and Q3, while Washington, D.C., saw its volume more than double in the same time period, Savills said. Los Angeles and Philadelphia's volume dropped in Q3 compared to Q2, the company found.
Law firms have begun to rethink their office space needs after the unexpected success – and high profitability – of remote work, said Thomas Fulcher, the chair of Savills' legal tenant practice group.
Law firms are no longer just asking how many employees they can put into a smaller space, but what kind of amenities and features will "energize" and attract employees and clients to the space, Fulcher said.
"It's become so much more about the people as opposed to about getting the best real estate deal," Fulcher said.
Law firms have had to adjust office return plans as coronavirus cases rose in the U.S. due to the Delta variant. Several firms that set mandatory return dates for the summer or early fall have had to push back those plans to November or even later.
Read more:
source: https://www.reuters.com/legal/legalindustry/law-firm-office-leases-signal-rebound-leaders-think-long-term-2021-10-19/
Your content is great. However, if any of the content contained herein violates any rights of yours, including those of copyright, please contact us immediately by e-mail at media[@]kissrpr.com.