New York’s law firm leasing volume down by 45%: report
Only 2 firms have inked deals of more than 100K sf in 2020
New York City typically leads the nation in leasing demand from law firms, but as with many other things, the pandemic has upended that.
Leasing volume from law firms dropped in New York City by 45 percent in the first half of 2020 compared to the same period last year, according to the latest Savills U.S. Law Firm Activity Report.
The sharp decline is the result of the industry’s “pandemic pause”; firms have postponed leasing decisions as they face economic and business uncertainty because of Covid-19.
During the first half of this year, only two law firms in New York signed leases of more than 100,000 square feet, and both were renewals. Allen & Overy inked a deal for 143,000 square feet at Rockefeller Group’s 1221 Sixth Avenue, while McLaughlin & Stern took 112,000 square feet at 260 Madison Avenue in Midtown East.
Allen & Overy was reportedly close to signing a lease at Tishman Speyer’s 630 Fifth Avenue before the pandemic hit. The firm instead negotiated a five-year lease extension to its current space near Rockefeller Center.
The New York market, however, is still faring better than San Francisco, which saw no significant law firm leasing activity in the first half of 2020.
Compared to New York and San Francisco, the Washington D.C. and Los Angeles markets were more resilient,with law firm leasing activity increasing by 47 percent and 165 percent, respectively, during the first half of this year compared to the same period last year.
Across major markets nationwide, law firms that occupy 20,000 square feet or more leased a total of 2.7 million square feet in the first half of 2020, down 31 percent from the same period last year, according to the report. The second quarter total was 25 percent less than the first quarter total.