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Before deciding to lease a substantial chunk of a new West Side office tower, the law firm of Lord Day & Lord, Barrett Smith reviewed 42 other sites all around Manhattan.
The willingness to conduct such an exhaustive search is a sign that law firms are no longer limiting their choice of locations. And its decision to take 200,000 square feet in Rudin Management Co.'s building at 1675 Broadway and 52nd Street shows how the allure of new buildings and the concessions law firms can attract from landlords are enticing them beyond their traditional midtown and downtown hubs, especially to development west of Sixth Avenue.
"There's been a change of attitude. Law firms are forced to reconsider location because of price and because of space," says Robert Emden, senior vice president of Edward S. Gordon, who has represented numerous law firm tenants. "In new buildings you can get options that are harder to get in an older East Side building, for example."
High occupancy costs
In New York, occupancy costs can take about 15% of law firms' gross receipts compared with only 10% elsewhere in the nation, says Mary Ann Altman, principal in Altman & Weil Inc., a law consulting firm based in Ardmore, Pa. These real estate pressures fuel the mergers, which in turn drive firms to take even more space.
"New York midsize firms are caught in a squeeze of having the same overhead of larger firms," she says. "Growth is a way to compete."
And while midtown asking rents for new construction average about $43 a square foot, the high office vacancy rate of about 13% in Manhattan allows these firms...