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A Big Tenant Class for D.C. Starts to Think Smaller

In the News
Washington Business Journal

By Tristan Navera

Rob Burger
Rob Burger of Sterne Kessler said law firms are turning remote-enabled.

Several D.C. law firms have been on the move this year to new — and, more significantly, smaller — homes.

In the past three months alone, nine firms have inked leases for a combined 540,000 square feet in D.C., with all but one of them relocating to new digs.

More notably, many of these firms are downsizing, showing just how quickly the legal workforce has shifted during the Covid-19 pandemic — and dealing a significant blow to the local real estate landscape given its reliance on large law firm leases. In 2021 alone, local law firms have shed at least 239,750 square feet, 91% of that in the District and the remainder in Northern Virginia, as they either move or ink smaller leases in the same building, according to CBRE data.

“There’s a lot of interest in what we’re doing in the legal world,” said Rob Burger, chief operating officer of Sterne, Kessler, Goldstein & Fox PLLC, which is downsizing its home by 42% to occupy 71,000 square feet at 1101 K St. NW next year. “We think this is how the law business is going to be in 10 years. It’s got to be more remote-enabled and adaptable space.”

The industry’s largest dispenser of square footage thus far this year, per CBRE’s data, is Gibson Dunn & Crutcher LLP, which announced Oct. 4 it signed a 16-year lease for 163,750 square feet, or more than half of the building being developed at 1700 M St. NW. The firm’s 346 staff will move from its current 1050 Connecticut Ave. NW, where it has resided in 205,000 square feet since 2012. The company, which is dropping 20% of its total space with the move, didn’t comment further.

CBRE data shows another eight law firms leased a combined 377,000 square feet in the third quarter. Katten Muchin Rosenman LLP is slimming from 72,300 square feet at 2900 K St. NW to 55,300 square feet at 1919 Pennsylvania Ave. NW, while Rothwell Figg Ernst & Manbeck PC is downsizing from 42,200 square feet at 607 14th St. NW to 31,200 square feet at 901 New York Ave. NW. Neither firm commented on their pending moves.

Within these smaller spaces, the firms are exploring new ideas about how to work. Chris Camarra, a partner at law firm Holland & Knight LLP, noted some firms are weighing plans for lawyers to share the same office, but to check in at different times of the week, during a Sept. 29 panel hosted by the Greater Washington Board of Trade.

“Firms have been looking at this for some time, and I think all of the professional services segment is experimenting,” Camarra said.

Not every law firm is opting to downsize, though. CBRE noted, for instance, a new 15,000-square-foot office for Cincinnati’s Taft Stettinius & Hollister LLP in the District, at 200 Massachusetts Ave. NW.

This comes at a time when some larger law firms are readying for big moves, or big decisions, on their own footprints. Wiley Rein LLC is expected to leave 335,000 square feet of leased space between 1776 K St. NW and 1750 K St. NW, both set to expire in 2024, for 166,000 square feet at 2050 M St. NW. WilmerHale’s leases in the 1800 block of Pennsylvania Avenue NW come due in 2023, when it plans to move to 288,000 square feet at 2100 Pennsylvania Ave. NW. And Pillsbury Winthrop Shaw Pittman LLP has 105,000 square feet at 2000 17th St. NW expiring in 2024, Newmark data show. None elaborated on their plans.

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