McDermott Will & Emery will be moving to Capitol Hill in November 2012. The firm has signed a letter of intent with Clark Enterprises and Boston Properties to occupy 165,000 square feet of Class A, office space at 500 North Capitol St., with an option to take on more.
According to sources with knowledge of the deal, which is among the largest recent private sector agreements in Washington, McDermott’s lease is for 15 years and the firm will pay in the range of $65 per square foot—meaning about $10.7 million each year. McDermott’s current offices occupy about 189,000 square feet at 600 13th St. N.W.
“We consider this a home run deal,” said Bobby Burchfield, co-managing partner of McDermott’s Washington office. Burchfield said the deal, which gives the firm all but two floors in a building currently being rented by the IRS, allows for the space to be fully renovated before the firm moves in.
Burchfield said the firm was attracted to the idea of “being able to brand the building as ‘The McDermott Building.’” He said, “These days, it’s important for firms to differentiate themselves from their competitors. We really liked the idea of moving to a highly trafficked location where people who pass by our building will necessarily think of McDermott Will & Emery.”
Burchfield said that the firm looked at roughly 23 locations, including in Rosslyn, Va. And in the Navy Yard neighborhood near Nationals Park, before deciding on the Capitol Hill location. Moving to 500 North Capitol St. will make McDermott only the second large law firm with an office on Capitol Hill. Jones Day moved to 51 Louisiana Avenue N.W. in 1999.
“This is a location that will be custom configured for a 21st Century law firm, and it’s in a location that is among the safest spots in Washington. We really felt that this was exactly what we were looking for,” Burchfield said.
As The National Law Journal previously reported, it’s a good time to be a law firm nearing the end of its lease in Washington. Commercial vacancy rates have hit double digits for the first time in more than a decade, driving landlords to make valuable concessions.
Burchfield agreed that McDermott was “fortunate” to be looking for a new lease in the current real estate market. “We found a very attractive package at this point in time that we might not have seen if our lease were ending at a later date,” Burchfield said.