- Savills discovered that large law firms leased 2.1 million square feet in major US cities in the last quarter
- The main driver of activity was Kirkland & Ellis, who signed an agreement for new offices in Chicago
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(Reuters) – Law firm leasing activity in major U.S. markets increased in the third quarter of 2021, according to a new report from global real estate agent Savills Inc, suggesting a gradual rebound in the law firm real estate market. lawyers more than 18 months after the start of the COVID-19 pandemic.
The report, released Monday, found that law firms occupying more than 20,000 square feet had leased 2.1 million square feet combined in the third quarter of 2021. That’s a 51% increase from the second quarter, when Savills had tracked 1.4 million square feet of leased space.
Large law firms leased 5.4 million square feet in major markets in 2020, a 37% drop from 2019, Savills said earlier this year.
“It’s certainly not in ‘recovery mode’ yet,” said Sarah Dreyer, vice president and research manager for the Americas at Savills, of the third quarter results. “This is the first indication that law firms want to re-engage in real estate planning and that they feel comfortable making longer term rental commitments than they did earlier. in the pandemic. “
Dreyer added that the major expansions and renewals the companies signed in the third quarter were carried out on a long-term basis of at least 10 years.
One of the main drivers of the third quarter rental activity was Kirkland & Ellis, which announced in August that it was moving from its current Chicago office to 300 N. LaSalle for 600,000 square feet of office space. square in the new tower being built about 800 meters away. 333 Wolf Point Square.
Given its size, the move has been a big part of recent rental activity in Chicago, which saw its volume of leased space quadruple between the second and third quarters, Dreyer said. But Dreyer said his assessment that the domestic market has thawed still stands.
âI don’t think it skews the trend,â Dreyer said.
New York saw a 92% increase in law firm rental volume between the second and third quarters, while Washington, DC, saw its volume more than double in the same period, Savills said. Los Angeles and Philadelphia volume fell in the third quarter compared to the second quarter, according to the company.
Law firms have started to rethink their office space needs after the unexpected success – and high profitability – of remote working, said Thomas Fulcher, chair of Savills’ legal tenants practice group.
Law firms are no longer just asking how many employees they can fit in a smaller space, but what kind of equipment and features will âenergizeâ and draw employees and clients to the space, Fulcher said.
âIt has become so much more about people than getting the best real estate deal,â Fulcher said.
Law firms have had to adjust office return plans as coronavirus cases increase in the United States due to the Delta variant. Several companies that have set mandatory return dates for summer or early fall have had to push these plans back to November or even later.
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