A recent sublease agreement struck between Seyfarth Shaw and Dewey & LeBoeuf indicates a broader trend among Washington-area law offices, says one real estate broker.
Last week, Seyfarth finalized a deal to sublease nearly 77,000 square feet of space at 975 F St., N.W., that was occupied by Dewey Ballantine before the firm’s 2007 merger with LeBoeuf, Lamb, Greene & MacRae. Upon the merger, lawyers from Dewey moved into LeBoeuf’s offices at 1101 New York Ave., N.W., after using up just a year-and-a-half of their 15-year lease on F Street.
“We’re seeing a lot of firms looking to preserve capital by looking for existing built out space,” says Patrick Marr, executive vice president of commercial real estate firm CB Richard Ellis Group, and Seyfarth’s broker on the deal. “We’re going to continue to see mergers and acquisitions, and more than likely in Washington that’s going to mean that two firms that have separate pieces of space are going to come together.” Marr says subleasing is a much cheaper option for firms that need new offices, and as mergers increase in a tough economy, more sublease options will come available.
Leasing space that has already been fitted to law firms’ specifications is a huge savings, says Marr, and according to a CB Richard Ellis press release, Seyfarth saved more than $6 million in construction costs by signing on to Dewey Ballantine’s old space.
Another potential way for law firms to save is to renew their existing leases instead of relocating to a new building. Marr says that currently “seven of 10 tenants” are renewing their leases instead of signing new ones—a clear indication that firms are looking to save money where they can.
Marr says Seyfarth has been actively growing its Washington office, and that its current 815 Connecticut Ave., N.W., locale got particularly crowded after the firm brought on a real estate group from Powell Goldstein in January. According to the firm’s Web site, Seyfarth now has 62 lawyers in its Washington office. It will move into the new space in early November.