Our data was used today in an article in the WSJ about law firms looking for office space. You can check it out at wsj.com or read the full text below.
Two decades ago, law firms helped colonize the west side of Midtown when they moved to then-edgy areas like Sixth Avenue, Times Square and Eighth Avenue in search of more-affordable rents.
Now the leases that firms signed back then are coming due, and many are finding they must pay dearly to stay or look to new neighborhoods like Downtown and the Far West Side.
Law firm Cravath, Swaine & Moore LLP in 1989 moved to the just-completed Worldwide Plaza, when rents in the area were about $35 a square foot, according to brokerage Cassidy Turley. But when the firm renewed its lease at the top of the market in 2007, the firm agreed to pay more than double that—$85 a square foot, according brokers familiar with the deal.
Law firms don't like to pay too much for office space because even junior associates expect offices, and because rent money comes out of the partners' pockets.
Now other large firms are looking Downtown and to the new Hudson Yards development, trading less-prime locations for cheaper rents and the benefits of being in new construction.
WilmerHale became one of the first large firms to move from Midtown to Downtown, when last spring it signed a 210,000-square-foot lease at 7 World Trade Center. The firm agreed to pay about $50 a square foot, including landlord concessions, according to people familiar with the matter.
Other firms have landed bargains by gambling on new developments along Eighth Avenue in Midtown.
Proskauer Rose LLP, which so far is still the only major office tenant at 11 Times Square, on 42nd Street and Eighth Avenue, agreed to pay rent of just over $67 a square foot, including concessions, according to CompStak, a database of leasing details.
If firms continue the westward migration, some could even end up in the new Hudson Yards development. White & Case LLP has been scouting for potential office space in the Hudson Yards area, according to a real-estate executive familiar with the matter.
Another firm, Morrison & Foerster LLP, last year agreed to anchor Boston Properties' development on West 55th Street and Eighth Avenue.
"We're at the very beginning of a westward migration," said Mark Edelstein, chairman of the firm's real-estate finance practice in New York. "Eighth Avenue is the new Sixth Avenue. It's a little premature, but it's going to happen."