The Savills Legal Tenant reviewed law firm transactions over 25,000 square feet in major markets across the US, spanning January 2016 to present. Our list, which can be seen in full by clicking below, includes 189 new leases and renewals, as well as expansions, extensions and subleases.
Here is what we found:
Smaller Firms Are More Likely to Relocate
- 55% of all transactions were relocations to new locations, showing that, as the use of law firm space continues to evolve, the opportunity to build more efficient and different types of space is winning out over remaining in older space or the disruption of renovating in place
- Small-to-mid-sized firms, those under 60,000 square feet, comprised the majority of these relocations. Only 30% of the top 20 largest firms chose to make a move
When Moving, Larger Firms Prefer New Construction
- Of total relocations, 32% were to newly constructed buildings
- While 70% of the top-20 transactions were renewals, those firms that did choose to move were far more likely, at 83%, to relocate to new construction than to existing buildings
- The Washington DC market saw the most moves to new construction, nine in total, as market conditions are particularly tenant-favorable and newly designed buildings are proving to be significantly more efficient than older, existing buildings
Firms Continue to Reduce Footprint
- Looking at before-and-after size metrics for the top 20 leases, 15 firms shed space in these transactions, contracting by an average of 15%, and with a range of 5% to more than 50%
- Two of the top 20 saw no change in footprint and only three firms expanded
Sublease is an Option
- 17 (or 9%) of all firms tracked took sublease space from another law firm or organization, taking advantage of lower rents and existing improvements to reduce their own costs
- Of those taking sublease space, the average square footage was 44,000 square feet and none was larger than 65,000 square feet
