By: Robert Kramp, Vice President and Director of Research, Jones Lang LaSalle, Midwest and Great Lakes Region
JLL research released the 2014 Law Firm Perspective, and with it, the industry’s leading trends and the latest real estate insights. Across the U.S., JLL found that the rightsizing wave is finally slowing down. Most firms have already downsized for efficiency, and are now looking for new approaches to location strategy.
Another national trend: There’s a supply shortage. Since location, often within prime office buildings, is critical for law firms, they “face more supply constraints than nearly any other industry,” according to the report.
On the upside, law firms are now making site selections based on employee preference. It’s all about talent for law firms, and some hotter, desired locations are in “fringe CBD” areas.
From national to local, law firms in Ohio, Michigan and Pennsylvania have been busy during 2014. Read on to find out what’s happening in your city’s law firm CRE landscape.
Law Firm Market Composition in the Midwest
There are eight law firms with more than 50,000 square feet currently located in the Cincinnati market. Two firms are currently in the market for large blocks of space. (Dinsmore is seeking 200,000 square feet!) However, activity was quiet in the law firm landscape during 2014—largely due to dwindling space availability.
In development news, construction at The Banks will bring new Trophy space to the downtown area.
Law firm activity was lively in downtown Cleveland during 2014. In fact, upward of 250,000 square feet was leased in the past year (mostly in the CBD), and 17 percent of the market is now occupied by law firms. Over the past ten months, the top transaction was Baker Hostetler, which signed a new lease at Key Tower for five floors.
It looks like activity will continue into 2015, as three firms are in the market for large blocks of space (ranging from 30,000 square feet to 50,000 square feet).
For law firms in Columbus, activity has been fairly quiet during the past year. Many new firms entered the market in 2013, and settled in during 2014. High-profile relocations include Calfee’s moved to the Huntington Center on South High Street, and Ulmer & Berne’s relocation from the KeyBank building to the Capitol Square building.
Law firms in Columbus will face limited space options in 2015. But, smaller tenants (less than 25,000 square feet) will keep the upper hand before 2016.
While activity was subdued on the Detroit law firm scene, 11 percent of the market is occupied by the legal industry. Of those firms, 15 occupy more than 50,000 square feet. Looking ahead, firms in Detroit face rent increases and limited opportunity for concessions; however, there is opportunity for redevelopment downtown, as well as available space options.
In recent years, activity in the Marcellus Shale industry has brought more than 50 energy companies to Pittsburgh. While rents are expected to increase and concessions are going down, there continues to be new opportunities for firms—all related to the shale industry.
About the Author
As Vice President and Director in the Midwest and Great Lakes Region at Jones Lang LaSalle, Robert has experience in the industrial, retail, multifamily and land sectors. Read up on Robert’s experience or connect with him on LinkedIn.