RENTS have come down and law firms are stealing the best deals, statistics show.
Rents in New York have dropped substantially since the start of the crisis and savvy law firms are locking in new agreements at the discounted rates.
In 2007, when the law firm of Orrick, Herrington & Sutcliffe began looking for a new location for its New York office, rents in a prestigious building that suited their tastes ranged from a pricey US$120 (AUD$144) to US$140 (AUD$168) a square foot. Two years and the GFC have seen the company secure a 220,000 square feet office at the Black Rock Building, for about US$70 (AUD$84) a square foot.
The building is owned by CBS Corp, and in addition to dropping the rent they have agreed to spend $150 a square foot to renovate the space, leaving Orrick with little to no out-of-pocket costs to set up the new office, reports The Wall Street Journal.
Orrick was planning to rent at the Citigroup Center, however, after the collapse of Lehman Brothers on September 15, the firm called a meeting and decided to wait the market out.
"We began to see very favorable concessions that indicated to us that it was the time, as they say at the blackjack table, to stick and let the dealer turn down another card," said Peter Bicks, managing partner of Orrick's New York office.
The deal comes during what is turning out to be one of the most tenant-friendly markets in decades. Prices for class-A office space in Midtown Manhattan have fallen 7.2 per cent since the Lehman collapse, according to real-estate research firm Reis, while the vacancy rates is 10.4 per cent, compared with 5.9 per cent prior to Lehman.