According to a recent study by Jones Lang LaSalle, Miami ranks #3 worldwide for percentage of office space occupied by law firms. Today’s South Florida Business Journal takes a look at why.
Law firms take up big chunk of Miami offices
If it seems like there are a lot of law firms in downtown Miami, that’s probably because there are.
In fact, the city’s central business district ranks third among major metropolitan areas and key legal hubs worldwide for the percentage of offices occupied by law firms, according to a new report by Jones Lang LaSalle.
Law firms soak up nearly 26 percent of the city’s 13.7 million square feet of downtown offices. That’s just behind Washington, D.C., and California’s Silicon Valley. And it is actually more law firms per office square foot than New York, Boston, Chicago, London and Los Angeles, the report shows.
But, it is relative.
Miami’s inventory of downtown offices is also much smaller than many other metros surveyed, so the total square footage occupied by law firms in Miami may still be less.
For example, Los Angeles has more than 28 million square feet of central business district offices and 43 law firms that occupy more than 50,000 square feet. Washington has about 32 million square feet with 73 firms larger than 50,000 square feet. Miami has about 10 firms larger than 50,000 square feet.
Even so, there is little doubt that law firms are major pillars of the downtown real estate market.
“I think they sustain us and they have maintained a strong base for us,” said Richard Schuchts, senior VP of Jones Lang LaSalle in Miami. “It just stresses the importance of law firms in this community.”
Schuchts said the city began emerging as a legal center at the dawn of the 1990s, with many firms lured here by legal work spinning off the savings and loan debacle.
The city’s rise as an international trade and business power spot drew more, as did immigration, real estate and financial services sectors.
Now the bust, with its wave of litigation and class action suits, promises to have more firms dipping their toes in Miami’s legal waters, according to Jack Lowell, VP of Flagler Real Estate Services.
“It is a reflection of the economy,” he said.
Many firms with expiring leases are seizing on the soft office market as an opportunity to hammer out aggressive leases. Some are renewing at existing spaces, like Hunton & Williams did at 1111 Brickell Ave. Others are opting to relocate, lured by landlords dangling free rent and hearty buildout dollars.
Many of the largest firms might have landed, but the legal real estate shuffle is not quite over yet. More than 14 percent of downtown law firms are still on the hunt for space, the report shows.
Among the firms on the office prowl: GrayRobinson, 35,000 square feet; Duane Morris, 20,000 square feet; and Baker & McKenzie and Jones Walker, which are both looking for about 15,000 square feet.
Some law firms, like Bilzin Sumberg Baena Price & Axelrod and Greenberg Traurig, have cut deals to relocate from older offices to newly opened ones, but they are not necessarily taking more space, real estate brokers say.
“Law firms, like any other business, also tend to become more efficient in the their business operations,” said Tom Capocefalo, managing director of Studley. “We may have a larger number of law firms, but they may take less space because of efficiencies.”
Greenberg Traurig, Miami’s largest legal occupant, soaked up 125,000 square feet at the new Wells Fargo Center, which is more than 20 percent less space than it occupied at its previous address, 1221 Brickell Ave.
Bilzin Sumberg, which slid into digs at the new 1450 Brickell tower last month, also occupies about 20 percent less than it did at Wachovia Financial Center.
Signing the firm as its first and largest tenant was a game-changer for 1450 Brickell.
“They were extremely appealing to the 1450 ownership group,” said Tere Blanca, president of Blanca Commercial Real Estate, which handles leasing for the 583,000-square-foot tower, which opened earlier this year. She said having a firm like Bilzin Sumberg “raises the profile of a building with many other potential prospects in the market place.”