The leasing patterns for big law firms in recent years will most likely show the proof if the commercial real estate has recovered from the worst of the Great Recession. A recent report “Law Firm Perspective,” which studies in detail leasing market conditions for large legal business. The report found that firms are facing more and more constraints as the deal climate shifts in the favor of landlords over tenants. In San Diego’s submarkets where law firms like to cluster such as Del Mar Heights, downtown and UTC have been leased up. Asking rents in these areas are 15 percent to 30 percent higher than the region and rates rising as longer team needed. In the market for top-tier commercial space, the office of large law firms in San Diego take up about 7 percent of the space available.
Excerpts from the Article:Need proof that commercial real estate has recovered from the worst of the Great Recession? Well, just pore over the leasing patterns for big law firms in recent years. Large-plate floor spaces are drying up, especially in San Diego’s submarkets where law firms like to cluster: Del Mar Heights, downtown and UTC. “Asking rents in those areas are 15 percent to 30 percent higher than the region overall,” the JLL report noted. “With very few large blocks of space and only one speculative under construction, build-to-suits (BTS) are one of the few options for larger law firms, as seen with the Latham & Watkins 70,000-square-foot BTS completed this year.” With those challenges in mind, JLL’s Moore said a number of savvy law firms began restructuring their leases to get the best long-term deal available with rates rising.
Citation and link:
York, Tom. “Law Firms Opt for Renewals as Landlords Gain Leverage.” SDBJ News., 14 Nov. 2014 Web. 17 Nov. 2014.