Lawyers can be a landlords’ best friend
Law firms weren’t just responsible for some of Manhattan’s biggest office deals, they also tend to grab — and fill — large slices of office properties that spell promise for commercial owners, Crain’s reported.
Last year, law firms leased 3 million square feet in the borough, according to CBRE — one of the highest volumes from the sector in recent decades.
A separate report from Cushman & Wakefield found an even greater transaction volume for law firms: 4.3 million square feet of office commitments in New York last year. Across the country, the report determined law firms committed to nearly 17 million square feet.
Two of the biggest leases of the year had a law firm on the tenant side of the transaction. Paul, Weiss, Rifkind, Wharton & Garrison signed a 20-year lease for 765,000 square feet at Fisher Brothers’ 1345 Sixth Avenue, while Davis Polk & Wardwell signed a 25-year extension at RXR’s 450 Lexington Avenue for 700,000 square feet.
Several prominent law firms appear to be in the market for office space, including Willkie Farr & Gallagher and Ropes & Gray, both of which have lease expirations coming in three years.
Not only are law firms leasing space, they’re occupying it, too. The daily attendance of law firms is 65 percent, according to a recent survey from the Partnership for New York City. That ties the industry for second in the city, trailing only real estate.
Even if law firms are the belle of the office ball, their needs are waning. The companies lease roughly 600 square feet per lawyer, down 40 percent from pre-pandemic days, according to Savills. CBRE’s Rapp expects law firm leasing activity to fall this year because fewer leases are expiring in the market.
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