San Diego Business Journal

As Leases Expire, Most Law Firms Elect to Stay in Current Sites

REAL ESTATE: Favorable Terms Lead Some to Downtown S.D. Offices By Lou Hirsh Monday, December 19, 2011

An office market still tilted in tenants’ favor created ideal circumstances for law firms such as Duane Morris LLP to locate a new home in downtown San Diego in 2011, while others — including Robbins Geller Rudman & Dowd LLP and Gordon & Rees LLP — found sound financial reasons to stay right where they were.

Ed Cramp, managing partner at Duane Morris, says the firm started looking for new digs about two years ago, realizing it was running out of space at its West Broadway home for its expanding team of litigators, corporate law and intellectual property specialists. It wound up fielding offers from seven or eight prospective landlords before deciding to take a spot at Irvine Co.’s Symphony Towers on B Street.

“Our firm is in a growth mode, and we needed enough space to accommodate that staff,” Cramp said of the practice, which is part of a global firm and will set up shop in its new home with about 28 attorneys and support workers in early March.

According to a recent national report by the brokerage firm Jones Lang LaSalle, the legal industry is seeing many firms downsize and otherwise “right-size” their space needs, in part because of the tight economy but also due to the rise of technology allowing companies of all kinds to do more with less — including personnel and square footage.

Of those firms with leases expiring, nearly two-thirds nationally are deciding to stay in their current locations.

Most Activity Downtown

As of midyear 2011, law firms in San Diego County had leased 424,000 square feet, with 77 percent of activity occurring in downtown due to the leverage tenants have in that submarket, following three consecutive years of occupancy losses. The 2011 activity followed what JLL called a “banner year” in 2010, when law firms leased 731,000 square feet of office space in the San Diego region.

The largest local transactions of 2011 included Robbins Geller’s 114,000 square foot renewal with a space contraction at 655 West Broadway; and Gordon & Rees’ 41,000 square foot renewal with contraction at 101 West Broadway.

In addition to Duane Morris’ recent move to sign a five-year lease for approximately 28,000 square feet at 750 B Street, firms relocating locally in the past 12 to 18 months have included Procopio, Cory, Hargreaves & Savitch LLP, Knobbe Martens Olson & Bear LLP, Lewis Brisbois Bisgaard & Smith LLP, and Troutman Sanders LLP.

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