As reported in Atlanta Business Chronicle
Atlanta’s biggest law firms are giving up floor after floor of the best office space in the city as they try to slash tens of millions of dollars in real estate costs.
Large firms that can combine the best talent with the lowest overhead will have the advantage as their clients continue to cut back on legal work and fees, industry insiders said.The latest giant on the verge of making a move is Alston & Bird LLP, which leases about 435,000 square feet between two buildings, One Atlantic Center and Atlantic Center Plaza at West Peachtree and 14th streets. Atlanta Business Chronicle has reported that many expect the law firm will consolidate into about 300,000 square feet within the 50-story One Atlantic Center.
The developer Daniel Corp. has also pitched the law firm on a new office tower.A decision could be reached in September, according to sources familiar with negotiations.Alston & Bird, the city’s largest law firm, declined to comment on negotiations, as did its broker,Cushman & Wakefield of Georgia.
Alston & Bird isn’t alone.
Given the slow recovery, and no clear picture on when job growth in Atlanta will return to the pace it saw in the mid-2000s, other big law firms are either downsizing their current office space or being much more cautious about factoring room for expansion.
Kilpatrick Stockton LLP, the city’s third-largest law firm, gave back about three floors of office space when it renewed its lease at 1100 Peachtree earlier this year.King & Spalding LLP has subleased two floors at 1180 Peachtree, real estate insiders said. The 41-story tower was built for the firm in 2006.
Troutman Sanders LLP, the city’s fourth-largest law firm, is trying to sublease two floors at Bank of America Plaza, a spokesman confirmed.In recent months, other Midtown law firms Bryan Cave LLP, Holland & Knight LLP, and Nelson Mullins Riley & Scarborough LLP have each put at least one floor of office space on the market for sublease.
The moves stem, in part, from reducing real estate costs.
Space in Midtown’s most prominent towers is expensive, often running at least $29 a square foot in gross annual rent.At that rate, a firm that signs a 15-year deal for 100,000 square feet (about four floors of office space) would pay roughly $43 million in rent over the term of the lease, excluding escalation and concessions.
A decade ago, law firms made up some of the largest deals in the city. They still do, but the days of the 400,000-square-foot deal might be coming to an end.“They don’t see any job growth on the horizon,” said Ben Raney of Raney Real Estate, which specializes in representing law firms. “Law firms of the past weren’t always as frugal with their real estate. That’s not the case anymore.”
Job losses are coinciding with the downsizing.
Alston & Bird went from 430 attorneys and 848 total Atlanta staff in 2008 to 398 attorneys and 726 total staff in 2010. King & Spalding reduced its number of attorneys from 420 and it staff from 1,050 in 2008, to 360 attorneys and 908 staff in 2010.
CFO Best Practice Sponsor: Cambridge Consulting Group was formed more than 10 years ago to help large organizations reduce their costs by eliminating their leasing obligations for excess commercial real estate space. Founded by Dave Worrell, a former Corporate/Facility Director, Cambridge Consulting Group offers companies a better option than subleasing office space they no longer need or use. Using a newer financial strategy- Negotiated Lease Buyouts, Cambridge Consulting has saved Fortune 500 companies millions of dollars in commercial lease obligations. For more information please visit their website- www.ccgiweb.com
Atlanta’s biggest law firms are giving up floor after floor of the best office space in the city as they try to slash tens of millions of dollars in real estate costs.
Large firms that can combine the best talent with the lowest overhead will have the advantage as their clients continue to cut back on legal work and fees, industry insiders said.The latest giant on the verge of making a move is Alston & Bird LLP, which leases about 435,000 square feet between two buildings, One Atlantic Center and Atlantic Center Plaza at West Peachtree and 14th streets. Atlanta Business Chronicle has reported that many expect the law firm will consolidate into about 300,000 square feet within the 50-story One Atlantic Center.
The developer Daniel Corp. has also pitched the law firm on a new office tower.A decision could be reached in September, according to sources familiar with negotiations.Alston & Bird, the city’s largest law firm, declined to comment on negotiations, as did its broker,Cushman & Wakefield of Georgia.
Alston & Bird isn’t alone.
Given the slow recovery, and no clear picture on when job growth in Atlanta will return to the pace it saw in the mid-2000s, other big law firms are either downsizing their current office space or being much more cautious about factoring room for expansion.
Kilpatrick Stockton LLP, the city’s third-largest law firm, gave back about three floors of office space when it renewed its lease at 1100 Peachtree earlier this year.King & Spalding LLP has subleased two floors at 1180 Peachtree, real estate insiders said. The 41-story tower was built for the firm in 2006.
Troutman Sanders LLP, the city’s fourth-largest law firm, is trying to sublease two floors at Bank of America Plaza, a spokesman confirmed.In recent months, other Midtown law firms Bryan Cave LLP, Holland & Knight LLP, and Nelson Mullins Riley & Scarborough LLP have each put at least one floor of office space on the market for sublease.
The moves stem, in part, from reducing real estate costs.
Space in Midtown’s most prominent towers is expensive, often running at least $29 a square foot in gross annual rent.At that rate, a firm that signs a 15-year deal for 100,000 square feet (about four floors of office space) would pay roughly $43 million in rent over the term of the lease, excluding escalation and concessions.
A decade ago, law firms made up some of the largest deals in the city. They still do, but the days of the 400,000-square-foot deal might be coming to an end.“They don’t see any job growth on the horizon,” said Ben Raney of Raney Real Estate, which specializes in representing law firms. “Law firms of the past weren’t always as frugal with their real estate. That’s not the case anymore.”
Job losses are coinciding with the downsizing.
Alston & Bird went from 430 attorneys and 848 total Atlanta staff in 2008 to 398 attorneys and 726 total staff in 2010. King & Spalding reduced its number of attorneys from 420 and it staff from 1,050 in 2008, to 360 attorneys and 908 staff in 2010.
CFO Best Practice Sponsor: Cambridge Consulting Group was formed more than 10 years ago to help large organizations reduce their costs by eliminating their leasing obligations for excess commercial real estate space. Founded by Dave Worrell, a former Corporate/Facility Director, Cambridge Consulting Group offers companies a better option than subleasing office space they no longer need or use. Using a newer financial strategy- Negotiated Lease Buyouts, Cambridge Consulting has saved Fortune 500 companies millions of dollars in commercial lease obligations. For more information please visit their website- www.ccgiweb.com
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