Real Estate Roundup: Alston Snags Former Dewey Space
When it comes to housing its Silicon Valley operations, Alston & Bird seems drawn to locations with a somewhat haunted history.
The firm—which first entered the California market in 2008—is in the process of vacating the Menlo Park offices once occupied by Heller Ehrman and moving to an East Palo Alto building most recently occupied by Dewey & LeBoeuf, which had sublet a portion of its space there to Howrey. Dewey, Heller and Howrey, of course, are currently in bankruptcy.
Under the terms of the new lease, which was first reported by the Silicon Valley Business Journal, Alston's local office will inhabit a single, 28,000-square foot floor at 1950 University Circle after abandoning its present 27,000-square foot office at 275 Middlefield Road. The move is scheduled to take place in April.
Alston’s local managing partner, Steven Hemminger, told the Business Journal that the new space can accommodate 45 attorneys—the firm currently has 29 Silicon Valley–based lawyers—and that one of its attractions is the ability to consolidate its operations from two floors to one.
The space's previous tenant, Dewey, was until recently the target of a $3.78 million claim filed by the building's owner, Wells REIT (now Columbia Property Trust) in connection with the defunct firm's Chapter 11 bankruptcy. Wells REIT claimed it is owed the money under a lease signed by Dewey that was due to expire in 2015.
At a hearing in federal bankruptcy court in Manhattan earlier this month, attorneys for Dewey’s liquidation trust asked that the claim be dismissed, in part because Well REIT had failed to respond to requests for further documentation. While expressing surprise that the landlord seemed to have given up on the claim, the judge overseeing the case nonetheless granted the request. With word of Alston’s move emerging a few days later, the landlord’s inaction makes more sense.
Meanwhile, on the East Coast, a pair of Am Law 100 firms recently signed major leases in New York City.
Jones Day confirmed that it will consolidate its current trio of midtown offices in a single downtown location by moving its roughly 500 New York–based lawyers and staffers into the top seven floors at 250 Vesey St. The 330,000-square-foot space, which currently houses the offices of building landlord Brookfield Office Properties, will be gutted and refurbished before Jones Day moves in under a 20-year lease in early 2016.
Jones Day partner Willis Goldsmith, who led the firm's New York operation until 2012, says it took three years to settle on the new location and that there were few other decent options. “As we grew, we simply needed to have more space,” Goldsmith says, adding that "there was no room for growth” in the firm's current constellation of offices.
Goldsmith says Jones Day is excited about moving downtown, a neighborhood that, among other things, is well served by public transportation: “We are firm believers in the importance of bringing lower Manhattan back to what it was, and we are committed to being part of that process.”
The new space, Goldsmith adds, “is going to be spectacular,” and will incorporate the latest technological enhancements being deployed in the build-out of law firm offices. The wraparound views of the city, he says, are an added bonus.
Further uptown, Kasowitz Benson Torres & Friedman has opted to keep its headquarters in its current location at 1633 Broadway, signing a 20-year renewal on 225,000 square feet of space that kicks in when the firm's current lease expires in 2015, the firm announced in late November.
Kasowitz real estate partner Adam Endick, who worked on the deal, told The Am Law Daily last month that the firm shopped around for about eight months, then “realized we all wanted to stay. … It’s just what we were all used to, and the building offered us a great deal.”
Below is a roundup of other recent law firm lease deals involving large law firms.
•Hogan Lovells recently moved to 4085 Campbell Ave. in Menlo Park from its previous Silicon Valley location in Palo Alto. It's the office's first move since the firm then known as Hogan & Hartson opened the Silicon Valley outpost in 2008. Hogan Lovells, the product of a 2010 merger, now occupies 39,100 square feet of space on a 10-year lease.
•Also in Silicon Valley, Morgan, Lewis & Bockius has preleased 60,000 square feet in a building at 1400 Page Mill Road where ground is scheduled to be broken in mid-2014. Silicon Valley Business Journal reports that the lease is among the most significant to be signed in the area this year.
•In Florida, sibling publication Daily Business Review recently reported on a trio of law firm lease deals, all of them tied to Miami’s Southeast Financial Center, which already houses 24 law firms. In the first, Miami-based Shutts & Bowen is planning a move across the street in November 2015 to a new headquarters space in the financial center. The firm will occupy 69,155-square-feet spread across three floors on a 15-year lease. Shutts & Bowen managing partner Joe Bolton tells DBR they were attracted in part by the unobstructed views on the upper floors. Squire Sanders, meanwhile, is renewing its lease in the 55-story tower but moving up two floors. Squire will occupy 30,109 square feet, DBR reports.The firm has been in the building since its 2005 merger with Steel Hector & Davis. And White & Case has renewed a lease on 57,954 square feet across three floors—the fourth-largest lease signed in Miami’s central business district in 2013, according to DBR. White & Case has been in the building since 1987 and will be redesigning its space.
•Nixon Peabody is jumping onto the recent trend toward law firms downsizing their offices with its planned move in Washington, D.C. As the Washington Post reports, the firm signed a 15-year lease for 65,000 square feet at 799 Ninth St. NW—30 percent less space than it occupies in its current D.C. office. Nixon considered a total of 23 locations in the area before making its final decision, local office managing partner Jeffrey Lesk told the Post.
•Davis Wright Tremaine renewed its lease for 43,801 square feet at 865 S. Figueroa St. in downtown Los Angeles. The firm considered making a move but ultimately decided to stay in the building, where it has been located since 1999, because of attractive rents, lease flexibility, and easy parking, according to a firm press release.