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Law firms face more supply constraints than companies in nearly any other industry. With fewer space options, your firm may find itself battling with competitors not only for clients—but for desired office location as well. Learn how leading firms are combating the space squeeze with modern, cost-cutting location and workplace strategies. And, see the top markets across the country in asking rents, Class A premiums, law firm concentration and more.
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Key themes shaping the
U.S. Law firm market
2014
Market dynamics creating waves of opportunity
for law firms
While the tides are slowly shifting,
opportunities to optimize costs remain
for law firms that focus on maximizing
the efficiency of their real estate
footprint, while enhancing strategies
around talent in fringe urban cores
where Millennials live and ideally want
to work.
The Rightsizing wave is peaking
have put efficiency
measures in
place in new or
restructured leases.
Market timing is critical
for firms with upcoming
lease expirations due to
limited supply and a
slowdown of second
generation options
coming to the market.
55–90% of law firms in primary
and secondary markets
Tenants should consider
relocation to less-
expensive submarkets, or
fringe CBD micromarkets
where Millennials live OR
execute deals in well-
located or repositioned
second-gen buildings.
With office space in limited supply
and rents on the rise (up 3.3%) in
top-tier CBD assets, tenants will pay
an average 18.1% premium for
Trophy space.
18.1%
Law firms are feeling the squeeze
It’s all about talent
when it comes to
site selection and
long-term talent
acquisition.
Evolving real estate areas growing in appeal
for firms and attracting Millennials:
River West
(Chicago)
Mount Vernon Triangle
(Washington, DC)
LoDo
(Denver)
Hudson Yards
(Manhattan)
South Lake
Union (Seattle)
Location does not equal status
Improved technology has
enabled firms in high-cost
metros such as Boston, New
York, Washington, DC and
San Francisco to relocate
nonrevenue functions
(i.e. administrative, marketing,
human resources) to lower
cost areas:
Firms can stay
competitive, maximize
profitability and
increase efficiency.
the Sunbelt,
Midwest, Mountain
West or to cheaper
buildings to save
on rent and labor.
Firms relocating non-revenue functions to save on costs
Personal space is
more desirable – U.S.
firms spend a large
portion of their time on
research and writing.
Despite moves toward
efficiency, U.S. firms by in
large are wary of adapting
to more contemporary
open-space.
More “me” than “we” space is still the name of the game
1 Silicon Valley
$88.44 p.s.f.
Top 10 markets: Average Class A asking rent ($ p.s.f)
2. New York $76.96
3. San Francisco $62.79
4. Washington, DC $60.28
5. Boston $54.61
6. Fairfield County $47.31
7. Austin $43.14
8. Houston $42.22
9. Miami $41.09
10. Los Angeles $38.13
Source: JLL Research
Top 10 markets: Annual change in Class A asking rent (%)
Source: JLL Research
1 Raleigh-Durham
15.6%
2. Fort Lauderdale 12.9%
3. Oakland 11.8%
4. N. Virginia 10.4%
5. San Francisco 8.7%
6. Portland 8.3%
7. San Diego 8.3%
8. Boston 7.6%
9. Seattle 6.9%
10. Houston 6.4%
Top 10 markets: Average rent premium for Trophy space (%)
Source: JLL Research
1 Baltimore
40.0%
2. Fort Lauderdale 36.2%
3. Raleigh-Durham 36.0%
4. Chicago 34.0%
5. Seattle 30.0%
6. Dallas 30.0%
7. Denver 30.0%
8. Richmond 30.0%
9. Columbus 30.0%
10. N. Virginia 25.2%
Top 10 markets: % of Class A market occupied by law firms
Source: JLL Research
1 Washington, DC
45.0%
2. Silicon Valley 44.2%
3. Fort Lauderdale 37.6%
4. Austin 29.1%
5. Cleveland 27.4%
6. Columbus 26.7%
7. Richmond 23.4%
8. Miami 20.4%
9. Philadelphia 20.0%
10. St. Louis 19.7%
Source: JLL Research
Top 10 markets: Firms occupying > 50,000 s.f.
1 New York
119
2. Washington, DC 92
3. Chicago 54
4. Los Angeles 36
5. Dallas 31
6. Boston 28
7. Houston 27
8. Atlanta 27
9. San Francisco 26
10. Philadelphia 23
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the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no
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Contacts
12
Americas Brokerage
Tom Doughty, International Director
+1 202 719 5652
Elizabeth Cooper, International Director
+1 202 719 6195
Research
John Sikaitis, Regional Director
+1 202 719 5839
Lauren Picariello, National Director
+1 617 531 4208
Phil Ryan, Research Analyst
+1 202 719 6295
© Copyright 2014 Jones Lang LaSalle
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