What do law firm Dewey & LeBoeuf’s problems mean for the Midtown office market? The Wall Street Journal reported that if the firm were to close, it would flood the neighborhood’s office leasing market with almost 500,000 square feet of space — even as it already maintains an increased vacancy rate.
As The Real Deal reported, Dewey has lost dozens of its 300 partners so far this year, including Stuart Saft last week, and faces declining earnings and internal conflict over compensation policies.
Midtown’s Class A sublease vacancy for April increased to 5.27 million square feet from December’s tally of 5.1 million square feet, according to the Journal. Dewey leases approximately 470,000 square feet at the Paramount Group’s 1301 Sixth Avenue between 52nd and 53rd streets. Sources told the Journal that Dewey has already offered up its 40,000-square-foot executive floor for sublease and that over 12 potential tenants, including other law firms with expiring leases, have considered the offices.