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Law Firm Perspective

United States | 2014

2

Law firms will see real estate opportunities continue to shift away in the current expanding economic cycle. However, opportunity to optimize real estate costs will remain for firms that focus intently on maximizing the efficiency of their real estate footprint, while enhancing strategies around talent in fringe urban cores where Millennials live and ideally want to work.

JLL | United States | Law Firm Perspective | 2014

Table of contents

3

Key themes shaping the U.S. law firm market 4

2014 U.S. law firm office clock 9

Local U.S. law firm markets

Atlanta 11

Austin 12

Baltimore 13

Boston 14

Charlotte 15

Chicago 16

Cincinnati 17

Cleveland 18

Columbus 19

Dallas 20

Denver 21

Detroit 22

Fairfield County 23

Fort Lauderdale 24

Houston 25

Indianapolis 26

Long Island 27

Los Angeles 28

Miami 29

Minneapolis 30

New York 31

Oakland 32

Orange County 33

Philadelphia 34

Phoenix 35

Pittsburgh 36

Portland 37

Raleigh-Durham 38

Richmond 39

Sacramento 40

San Diego 41

San Francisco 42

Seattle-Bellevue 43

Silicon Valley 44

St. Louis 45

Washington, DC–Downtown 46

Washington, DC–Northern Virginia 47

Westchester County 48

Appendix 50

Contacts 54


Mid- to large-sized law firms are still in contraction mode across U.S. markets, giving up roughly 17 percent of their space on average upon relocating in 2014, up from 14 percent in 2013 and 16 percent in 2012. However, over the past 12 months, the number of firms rightsizing is beginning to show signs of slowing. Markets across the U.S. have reported that anywhere from 55 percent to upward of 90 percent of law firms in primary and secondary markets have already devised substantial efficiency measures in new or restructured leases. For law firms with upcoming lease expirations, the current plateau of rightsizing could make market timing even more critical. Not only is new supply through the development pipeline limited, but second-generation options coming to the market could slow. Over the long term, more space will come back to the market as even firms that have already rightsized have more opportunity in front of them for cost savings and efficiencies. U.S. firms could take a page from their global counterparts and close the gap on efficiency measures and workplace layouts, even if those efficiencies are more conservative.

Key themes shaping the U.S. law firm market

4JLL | United States | Law Firm Perspective | 2014

The rightsizing wave is peaking, but will continue to evolve


Law firms face more supply constraints than nearly any other industry because of their concentration in core assets in central locations, the tightest segment of office markets domestically. This both limits their options for relocation and results in the need to battle with other companies for some of the most desirable space in the country. The shortage of completions this cycle means that law firms may need to be highly aware of proposed developments and potentially secure anchor tenancies well in advance of lease expirations. At the same time, limited large-block availability is driving up rents, particularly in top-tier CBD assets. On average, law firms have seen rents in these submarkets rise 3.3 percent year-over-year and pay an 18.1 percent premium for Trophy space compared to Class A space. Law firms can offset these costs through relocation, either to nearby but less-expensive submarkets (such as the increasing shift from Midtown to Downtown Manhattan or to fringe CBD micromarkets where Millennials live and want to work) or through executing deals at well-located second-generation buildings with the potential for repositioning.

The supply shortage is kicking in, bringing with it higher rents


The law firm partner has always preferred locating their business in the heart of the business district, in close proximity to transit and clients. However, in recent years, fringe CBD and somewhat unorthodox locations to the typical law firm partner are becoming more and more desirable to associate-level and senior associate-level talent (the future of the firm), as these employees are increasingly opting to live in fringe CBD areas. Emerging micromarkets such as South Lake Union in Seattle, River West in Chicago, LoDo in Denver, the Mount Vernon Triangle in Washington, DC and Hudson Yards in Manhattan are some of the areas with evolving real estate characteristics that appeal to firms, but are closer to the favorable demographics and talented workforce that law firms need to thrive moving forward. This is happening even in the suburbs: Los Angeles-based firms specializing in media and entertainment law may find that the burgeoning tech and media scene in Playa Vista is more appealing than corporate-heavy Century City. Law firms should consider not just their current workforce, but also long-term talent acquisition and retention in potential relocations as competition for associates grows.

Talent, not a premier address, will increasingly influence site selection


About half of a typical law firm’s employees are not lawyers, but rather non-revenue administrative functions such as operations, finance, marketing and human resources. Furthermore, many firms still house contract attorneys, a lower-revenue source, in primary markets or high-priced real estate. With improved technology, headquartered firms in high-cost markets such as Boston, New York, Washington, DC and San Francisco are increasingly able to move these positions to lower-cost metro areas, including the Sun Belt, Midwest and Mountain West, or lower-priced buildings in primary cities, resulting in significant cost savings from rent and labor. This strategy keeps revenue producers in competitive products in core geographies and helps maximize profitability for firms by lowering labor costs and reducing redundancies across offices.

We don’t all have to sit together -firms relocating non-revenue functions


Despite changes in space utilization across industries, U.S. law firms on the whole remain somewhat hesitant to fully adapt to more contemporary, open-office plans compared to their global counterparts and other professional-and business-service industries. For instance, U.S. firms require more “me” than “we” space compared to other industries domestically as they spend more time on research and writing that requires personal space. In addition, American law firms have a lower partner-to-associate ratio compared to global counterparts and thus have a difficult time switching to non-office plans. In London and some cities in Asia, firms have more flexibility in terms of build-outs and workplace strategy due to the higher number of associates compared to partners. Further, the older office inventory found in U.S. CBDs favors traditional layouts. Despite some hesitation, even American law firms are demonstrating preferences for shared open-plan areas, interior glass-fronted offices, multipurpose collaborative space and lawyer lounges.

Despite moves toward efficiency, firms are still wary of aggressively reconfiguring offices

2014 U.S. law firm office clock


Peakingphase

Fallingphase

Risingphase

Bottomingphase

Source: JLL Research

Atlanta, PhiladelphiaBoston, New York (Midtown), United States

Seattle, Miami

Charlotte, Dallas, Fort Lauderdale,Los Angeles, Westchester County

Austin, Houston

Baltimore, Sacramento

New York (Downtown), Phoenix, Richmond

Fairfield County, Indianapolis, Minneapolis

Columbus, San Diego,Washington, DC

Pittsburgh, Portland

Chicago, Cleveland,Oakland CBD, Raleigh-Durham

San Francisco

Denver

Cincinnati, Detroit

St. Louis

Silicon Valley (Palo Alto)

Local U.S. law firm markets


Percent of market occupied by law firms

Number of law firms occupying> 50,000 square feet in the market

16% 27

Atlanta


Outlook

Challenges for law firms• Technology firms are beginning to drive demand in many of the Midtown

Trophy towers, competing for space options.• Delivery of new Class A inventory is still 12 to 18 months off and leasing

conditions are brisk; availability of premium contiguous options is increasingly scarce.

• Moderate rental rate appreciation may impact value-conscious firms as leasing conditions in the CBD become increasingly landlord-favorable.

Opportunities for law firms

• Planned towers are generally transit-oriented in terms of design and location, allowing for direct connectivity to the airport.

• Labor pool is expanding due to a robust population increase anticipated ahead.

• Rental rates remain discounted and attractive relative to gateway markets.

Atlanta-based firms made significant relocation and renewal plays in months following the recession, capitalizing on tenant-favorable leasing conditions and using the opportunity to streamline operations. Since then, however, real estate movement among industry participants has proven relatively sparse in Atlanta's urban submarkets. Only a handful of active requirements for space exist, suggesting leasing may continue to be slow through early 2015.

We do see opportunity on the horizon for smaller firms, which tend to serve local or regional clientele and are often highly specialized. These groups will likely see outsized benefit from continued improvement in the economy. As such, many Atlanta firms will grow quickly and find a need for more space. The question remains: Will they choose formal glass towers along the Peachtree corridor or gravitate to non-traditional converted warehouse-type product—once only reserved for the city's high-tech tenants. Regardless, we anticipate these nimble practices to be in the market first.

Mid- and large-sized firms are expected to eventually account for preleasing of much of the city's premium top-floor Trophy space as Atlanta's office development cycle matures. Asking rates for top elevator bank space will escalate into the low $40-per-square-foot range, drawing a sharp contrast against lease terms negotiated just following the recession..

Hunton & Williams600 Peachtree StreetRenewal43,000 s.f.

Bodker, Ramsey, Andrews, Winograd& Wildstein, P.C.3490 Piedmont RoadRenewal12,000 s.f.R

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Hollowell, Foster & Herring260 Peachtree StreetNew to market12,500 s.f.

2014 2015 2016 2017 2018Tenant-favorable marketNeutral marketLandlord-favorable market

Active law firm requirements in the market (s.f.)

Savell & Williams 25,000

Fish & Richardson 25,000

Kazmarek Mowrey Cloud Laseter 10,000

*rent difference from Class A average **averages on 10-year new/renewal transactions

Pricing and incentives (assuming a 10-year lease)

TI allowance ($ p.s.f.)** Free rent (months)**$45.00/$30.00 10/6

Net rent

$11.85Taxes

$3.40Operating expenses

$8.00Annual escalation

3.6%

20.0% 3.6% 25.0%

Premium for Trophy space*

Discount for negotiated rent*

Discount for sublease space*

Locational preference: The vast majority of Atlanta’s law firms choose to locate within the city’s urban submarkets of Buckhead, Midtown and Downtown. Central Perimeter has been urbanizing throughout the recovery. With a concentration of corporate occupiers nearby, transit options, and quality office inventory, the area often competes against Buckhead and Midtown. Proposed new towers in the area could threaten to lure firms from their traditional confines.


25%

Austin


Outlook

Challenges for law firms• Heightened demand in Austin's CBD will continue to push rental

rates upward.• Few immediate near-term large blocks remain available.


• A new wave of development is likely on the way, which could offset rental rate increases over the next few years. Proposed buildings, Green Water and 5th & Colorado could deliver up to 670,000 square feet by 2016.

• Heated demand for expansion and growth opportunities among all tenants in the CBD creates an environment that is favorable to law firms looking to give back space as they seek to maximize efficiency.

The landscape of Austin’s CBD has undergone a transformation, and law firms no longer dominate the downtown office landscape. Heated competition for space, largely driven by demand from high-tech tenants, has left law firms with fewer options for high-quality office space in the city.

The majority of the significantly sized law firms in town have already rightsized and locked down space for the next 10 years. However, new construction downtown has attracted several firms away from their existing space. At Colorado Tower, set to deliver this year, law firms represent 22.0 percent of preleased space, with Scott, Douglass & McConnico; Dubois Bryant, and Munsch Hardt Kopf & Harr all signing significant deals there.

A new wave of development is likely on the way, which could offset rental rate increases over the next few years. Firms who sign deals today might be overpaying in the future. The proposed buildings, Green Water and 5th & Colorado, could deliver up to 670,000 square feet by 2016. The 19,000-square-foot floor plates at 5th & Colorado are ideal for the shrinking footprint of the modern law firm.

Scott, Douglass & McConnico303 Colorado StreetRelocation40,483 s.f.

Greenberg Traurig300 W 6th Street Renewal with expansion21,859 s.f.

DuBois, Bryant & Campbell303 Colorado StreetRelocation24,273 s.f.



Andrews Kurth LLP 35,000

Chamberlain McHaney 15,000

Gardere Wynne Sewell 15,000



TI allowance ($ p.s.f.)** Free rent (months)**$45.00/$20.00 2.5/2.6

Net rent

$27.07Taxes



$1.00

20.0% 10.0% 25.0%





7Locational preference: The majority of law firms in Austin are located in the CBD, with proximity to the Capitol being a huge draw to the area. Due to high rents in Downtown Austin, some law firms, such as Vinson & Elkins, have opted to lease space in high-quality office projects in Southwest Austin or along the South MoPaccorridor. However, with construction finally commencing downtown, several firms are locking in deals at new developments.

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Locational preference: A handful of firms have relocated to Harbor East, but the majority of firms are located along Pratt and Charles Street in the CBD. Exelon's relocation to Harbor Point in 2016 will create a large block of Class A space at 750 E Pratt Street in addition to 50,000 square feet of speculative space that will deliver at Exelon's new headquarters. The two additional blocks will create opportunities for firms to continue their long-standing trend of migration south and east.


9%

Baltimore


Outlook

Challenges for law firms• A long-standing trend of flight to quality and limited construction pipeline

has resulted in limited large blocks of Class A space.• The trend of conversions of Class B office space into residential has

accelerated in the past year and taken a total of over 800,000 square feet out of supply.

• Vacancy along Pratt Street and in Harbor East will fall well below 10 percent in the coming year, which will likely lead to increasing Class A and Trophy rents.


• Landlords are still focused on tenant retention, especially for locations off Pratt Street in the CBD, and are offering generous concession packages.

• Law firms will have a new relocation option in Harbor Point at Exelon's new headquarters, which is set to deliver in 2016 with approximately 50,000 square feet available.

• For tenants not requiring Class A space along Pratt Street or Harbor East, rents along Baltimore and Charles Street have continued a downward slide.

Compared to the major reshuffling in the downtown Baltimore law firm market in 2010 and 2011, activity remained relatively limited in 2014, with a handful of notable leasing transactions and limited sizeable tenants in the market. Law firms have followed the overall market in a steady migration to the south and east in a flight to quality that has left elevated vacancy along Baltimore and Charles Street in the CBD. The trend has left highly desirable Pratt Street with only three available Class A blocks larger than 30,000 square feet and none greater than 50,000 square feet. Off Pratt Street in the CBD, inventory has continued to dwindle as the trend of conversion of Class B office space into residential apartments has accelerated.

In late 2013, 10–12 N Calvert Street, a partially occupied 178,992-square-foot Class B building, traded to a developer with plans to convert the building into 180 apartment units. Consequently, numerous law firm tenants in the building, primarily under 5,000 square feet, have been forced into the market, which helped drive needed leasing velocity in the Charles Street Corridor as they sought to relocate in close proximity to the courthouses. While large blocks of Class A space are limited, landlords continue to be aggressive in concessions, especially off Pratt Street.

Peter T. Nicholl36 S Charles StreetRenewal42,708 s.f.

Womble Carlyle & Sandridge250 W Pratt StreetRenewal10,487 s.f.

Shapiro Sher250 W Pratt StreetRelocation15,000 s.f.



N/A




Net rent

$11.85Taxes



3.0%

40.0% 5.0% 20.0%





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10%

Boston


Outlook

Challenges for law firms• Strong employment growth and urbanization have created enhanced

demand for CBD space.• Competition for space from high-tech companies will continue to push

Class A low-rise and Class B rents upward.• Concession packages continue to tighten given the landlord-

favorable market.


• Remaining spaces within build-to-suit projects provide mid-sized law firms options to rightsize.

• Large blocks of space in Class A buildings in the Financial District and Back Bay will come on the market in the next few years.

• Firms specialized in the intellectual property and high-tech industries have the ability to relocate to buildings in close proximity to high-tech companies.

Legal employment in Massachusetts is still down nearly 2,600 jobs from pre-recession peaks. While Boston is the hub of the law firm market in New England, we have seen a modest decline in employment over the past year. However, Boston is experiencing stronger growth in the intellectual property and corporate law practices, spurred by the area’s rise in the high-tech and life sciences fields.

As area law firms are reconfiguring offices to be more in line with trends in the industries they serve, they are looking for flexible, more efficient spaces and many are considering moves from more traditional and suburban locations. As a result, the Seaport District, dubbed the Innovation District and home to a growing number of high-tech start-ups and the pharmaceutical giant Vertex, has attracted law firms from within and outside Boston looking to maximize proximity to potential clients. For example, Goodwin Procter signed a build-to-suit lease to occupy 360,000 square feet at Fan Pier, downsizing from 415,000 square feet in Financial District partly as a result of a more efficient building with greater window-line ratios. Gunderson Dettmer, a business law firm specializing in early stage companies and venture capital firms, also signed a 27,000-square-foot lease at Joseph Fallon’s One Marina Park Drive on Boston’s waterfront. The result of these relocations and other similar transactions will be larger blocks of tower space on the market beginning to impact both vacancy and rents. A few of the larger contiguous availabilities being marketed early to avoid significant vacancy include spaces that will be vacated by Goodwin Procter at 53 State Street, State Street Corporation at 200 Clarendon Street and Copley Place as well as PwC and Verizon at 125 High Street.

Skadden500 Boylston StreetRelocation47,722 s.f.

Gunderson Dettmer 1 Marina Park DriveRelocation27,692 s.f.

Hemenway & Barnes75 State StreetRelocation44,233 s.f.



Prince Lobel 55,000

Cetrullo 37,500

Fragomen 35,000




Net rent

$36.61Taxes



3.0%

20.0% 10.0% 30.0%





28Locational preference: The city's premier law firms occupy space in the most prestigious office towers in Boston's Back Bay, Financial and Seaport Districts.

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Locational preference: The majority of law firms are located in the CBD and Southpark submarkets of Charlotte. Firms gravitate to buildings with views of the Charlotte Skyline and access to addresses on Trade and Tryon in the heart of the city's business district.


8%

Charlotte


Outlook

Challenges for law firms• New developments are moving into construction phase, such as 300 S

Tryon, at market-stretching rental rates, pushing landlords of Charlotte Trophy buildings to counter.

• If current proposals come to fruition, there could be only one contiguous option in the upper-elevator block greater than a single-floor in Class A+ product in the near future.

• Nearly all law firms have rightsized, leaving little hope that major law firm givebacks will generate second-generation space options for new-to-market and existing firms looking to relocate.


• Build-to-suit/anchor tenant opportunities such as 615 South College and Tryon Place offer an early commitment and an opportunity for signage in brand-new CBD space if a law firm is large enough to kick off these buildings.

• Pending contractions by Hearst Corporation will likely free up at least a floor of space within the Hearst Tower.

Due to the relationship between financial and legal services, Charlotte has maintained a large law firm concentration throughout its history. Even though footprints have shrunk, the number of attorneys in many firms is growing, particularly in financial services and real estate practices.

Since the recession, nearly all law firms larger than 50,000 square feet have rightsized their real estate footprint, with the exception of Moore & Van Allen, Womble Carlyle and a few others. In an effort to rightsizeimmediately post-recession, many law firms signed blend-and-extend leases, resulting in pending expiration dates over the next few years. The large number of pending expirations, coupled with the lack of available space due to high tenant demand among other industry sectors, in the coming years will pose a difficult time for law firms needing to expand, relocate or open offices in the Charlotte CBD.

McGuireWoods201 N Tryon StreetRenewal with contraction144,293 s.f.

Winstead201 N Tryon StreetRelocation24,872 s.f.

Shumaker, Loop & Kendrick101 S Tryon StreetRelocation28,456 s.f.



Womble, Carlyle, Sandridge and Rice 90,000

Tower Legal 15,000

Littler Mendelson 15,000




Net rent

$16.47Taxes



2.8%

11.0% 3.4% 25.0%





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10%

Chicago


Outlook

Challenges for law firms• As the delivery of two new office towers nears, the market for high-end,

high-rise Trophy space will continue to tighten and conditions will become landlord favorable.

• Availability of large-block spaces continues to decline, leaving fewer options for tenants of 100,000 square feet or more.


• Smaller firms and those willing to consider lower-profile spaces still have adequate options.

• Firms that have recently downsized and those that plan to will benefit from cost savings and a more efficient, modern brand.

Chicago has seen an active year with a number of law firms signing leases or entering the market for 100,000 square feet or more. Firms are rightsizing their space requirements, and this shift has triggered much of the market activity with law firms adjusting their space needs as an opportunity to brand themselves as efficient stewards of client fees and partner investment in order to reduce their footprints. Examples include Katten Muchin renegotiating its lease early to shed 25,000 square feet, Locke Lord’s sublease of 30,000 square feet to Harris & Associates and Jones Day entering the market ahead of its termination option.

Beyond the rightsizing trend, law firms are also starting to adjust their operations to capture business from Chicago’s growing high-tech and start-up activity. An example of this is Foley & Lardner providing 12,000 square feet and pro bono office hours for Catapult, a co-working space for later-stage start-up companies, a creative strategy to utilize unused space, while also potentially tapping new revenue streams.

Looking ahead, tenant concessions are expected to shrink or stabilize with the former more likely for Trophy assets and new development, a result of a limited supply of large-block Class A vacancies.

Seyfarth ShawWillis TowerRelocation 200,000 s.f.

Taft Stettinius & Hollister111 E Wacker DriveRenewal63,000 s.f.

DLA Piper444 W Lake StreetRelocation 175,000 s.f.



Jones Day 140,000

Clausen Miller 100,000

Arnstein & Lehr 100,000



TI allowance ($ p.s.f.)** Free rent (months)**$65.00 9

Net rent

$21.55Taxes



3.0%

34.0% 5.0% 30.0%





54Locational preference: Most of Chicago's largest law firms are located in the West Loop and Central Loop, with a few in River North. The Central Loop is also home to the largest share of the market's small- and medium-sized firms. The East Loop is still a viable option for firms looking for space at competitive rates, with an abundance of large blocks available with views of Grant Park or Lake Michigan.

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Locational preference: Cincinnati’s law firms are largely located in the CBD, due to the high concentration of Trophy and Class A buildings with access to courthouses and corporate clients. With the current development of the Kenwood submarket and the proposed development of the Mason/Montgomery submarket, law firms are eager to take advantage of this attractive space.


5%

Cincinnati


Outlook

Challenges for law firms• Large blocks of Trophy space are dwindling.• First-generation space is limited, with only one significant delivery

downtown in recent history.• As the market continues to tighten, rents are expected to increase over the

next 12 to 24 months


• Asking rents currently stand at depressed levels, providing tenants an opportune time to act on real estate decisions.

• Planned office space at the Banks will provide additional Trophy space in the CBD.

Cincinnati law firm activity has been generally restrained throughout 2014, as the diminishing availability of large, quality blocks of Class A space in the CBD has posed a challenge for those firms looking to relocate existing offices. While many smaller, local firms have found the need to scale back or rightsize their real estate needs, a handful of larger tenants have managed to locate suitable new office space among an increasingly tightening supply. DBL Law’s recent relocation from Carew Tower into 10,000 square feet at Atrium Two is an example of such, and illustrates tenants’ continued flight to quality within the CBD. The full-service law firm outgrew its space in Carew’s 35th floor, where it occupied roughly 7,500 square feet. Philadelphia-based Marshall Dennehey also found space for its first Cincinnati office, signing a lease for roughly 7,300 square feet at 312 Elm Street in the CBD as it seeks to cultivate its presence in Southwest Ohio.

In recent news, Dinsmore, the largest law firm in Cincinnati, is in the market for roughly 200,000 square feet as it looks to enlarge its footprint in the downtown area. Its current lease of 169,000 square feet at First Financial Center, located at 255 E. Fifth Street in the CBD, runs until 2018, but the firm has rapidly outgrown its space. Dinsmore has expanded significantly as of late, after merging with Peck Shaffer & Williams in March. While there are a few existing options for Dinsmore to explore, the firm may also consider its stake in new construction. 180 Walnut at the Banks, the proposed, 233,500-square-foot Class A office tower in phase I-B of the Banks may be a likely candidate, particularly as it comes with the availability of naming rights.

DBL Law221 E 4th StreetRelocation10,000 s.f.

Marshall Dennehey312 Elm StreetNew to market7,292 s.f.



Dinsmore 200,000

Confidential 60,000




Net rent

$10.82Taxes



2.8%

20.0% 12.0% 30.0%





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17%

Cleveland


Outlook

Challenges for law firms• Rent increases are forecasted in prime assets over the next 12 months.• Concessions will begin to taper off as leverage transitions to landlords.• Limited large blocks will hinder law firm with active requirements of more

than 50,000 square feet.


• Additional office product is in the development pipeline downtown.• Law firms signing leases over the next 12 months will lock in historically

favorable lease rates.

Law firm tenant activity remained elevated through 2014, with lease signings totaling more than 250,000 square feet. The majority of transactions occurred downtown and involved relocations as tenants looked to upgrade offices. The largest law firm lease signed over the last year was by BakerHostetler. The law firm signed a lease for five floors at Key Tower in Downtown Cleveland, though the firm will not move into the city’s tallest office building until January 2016. BakerHostetler expects to move its Cleveland attorneys and office staff, a total of about 300 employees, to 115,000 square feet at Key Tower. The law firm signed a 15-year lease for floors 17 to 21 at Key Tower, absorbing much of the space given back by Key Bank when it signed a long-term renewal in mid-2013. BakerHostetler will move from the PNC Center downtown, where it currently leases roughly 165,000 square feet.

Other notable law firm transactions include Vorys, which leased 42,000 square feet at 200 Public Square, about as much space as it currently occupies at One Cleveland Center. Additionally, Cleveland-based law firm Mansour Gavin, which relocated in the second quarter from its longtime home at 55 Public Square to 21,000 square feet at North Point Tower. With the move, Mansour Gavin was able to upgrade to newer office space and gain future expansion rights. Finally, Zashin & Rich, leased the last full floor of the Ernst & Young Tower in the Flats East Bank project, relocating from 55 Public Square.

BakerHostetler127 Public SquareRelocation 115,000 s.f.

Mansour Gavin1001 Lakeside AvenueRelocation 21,000 s.f.

Vorys200 Public SquareRelocation 42,000 s.f.



Taft 50,000

Frantz Ward 40,000

Javitch Block 30,000




Net rent

$13.24Taxes



2.5%

20.0% 15.0% 25.0%





13Locational preference: Cleveland's law firms are concentrated in the CBD, largely within the Financial and Public Square submarkets. Both areas are replete with a dense selection of Trophy and Class A assets offering convenient access to corporate clients as well as city, county and federal courthouses.

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Locational preference: As the state capital, Columbus’ law firms are mainly located in the CBD’s Capital Square and Arena District submarkets, offering the highest concentration of Trophy and Class A office properties with quick access to courthouses, corporate headquarters and state government.


4%

Columbus


Outlook

Challenges for law firms• Limited large blocks of Trophy and Class A space are available.• Law firms will need to analyze a landlord's financial health as recent market

conditions have depleted landlord resources.• Lease rates, though below historic norms, are trending upward as power

begins to shift into the hands of the landlord.


• Lease rates currently sit below historic norms, benefitting tenants.• Small tenants with requirements less than 25,000 square feet will retain

leverage over the next 12 months.

As forecasted, Columbus law firm activity has stabilized over 2014 following a lively 2013 that saw a number of big-name firms open doors throughout the Columbus market. The waters remained relatively calm this year as these tenants settle into their new space. However, a handful of firms made downtown headlines via relocations into high-profile buildings. For example, Cleveland-based Calfee confirmed it will move from the Fifth Third Center into more than 25,000 square feet on the 12th floor of Huntington Center, located at 42 S. High Street in the Capitol Square submarket. Calfee entered Columbus in 1987 and has occupied roughly 20,000 square feet on the 11th floor of the Fifth Third Center, located at 21 E. State Street, since an expansion in that building in 1999. In other news, a second Cleveland-based firm, Ulmer & Berne, recently relocated its office into 10,000 square feet on the 11th floor of the Capitol Square building, located at 65 E. State Street, after nearly 25 years in the KeyBank Building at 88 E. Broad Street. While Ulmer & Berne still remains in the Capitol Square submarket, its relocation from the KeyBank Building came with a slight reduction of its Columbus footprint, where it occupied about 11,000 square feet on the 16th floor.

Much of last year’s busy law firm scene originated from those looking to take part in the Marcellus Shale play, particularly though the addition of a number of satellite offices by outside firms. Activity on a local level has now begun to subside as a large portion of law firms have now established locations in the Columbus market. The majority of 2014 has been characterized by activity on a smaller scale as firms now look to stabilize or even rightsize their footprint.

Calfee41 S High StreetRelocation23,728 s.f.

Ulmer & Berne65 E State StreetRelocation10,000 s.f.



Reminger 25,000




Net rent

$12.71Taxes



2.0%

30.0% 17.5% 40.0%





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14%

Dallas


Outlook

Challenges for law firms• Uptown and the Arts District have tight vacancy and upward pressure on

rates, especially in the Trophy segment.• With several law firms expanding into the Dallas market, law firms are

facing new competition.


• Smaller firms have lots of available options, including backfilling excess space from other law firms.

• Two construction projects are currently under way, with a potential two or three additional developments breaking ground over the next year.

• Increase in institutional ownership in the CBD makes existing properties more attractive to law firms.

Law firm leasing activity has increased over last year for the Dallas market. While some firms have renewed and rightsized in their current locations, new and pending construction has lured a few of the larger firms from their established locations. Jackson Walker followed KPMG into the new KPMG Plaza at Hall Arts project in the CBD and GardereWynne Sewell and Sidley Austin are the first tenants to commit to Crescent’s new McKinney & Olive project in Uptown, scheduled to break ground in late 2014. Both of these projects are setting record asking rates, with full service gross rents in the $48.00- to $51.00-per-square-foot range. These rates are 15 to 20 percent higher than previous top rates.

Competition in the sector is also increasing locally due to the growth in energy and North Texas’ overall economic strength. In addition to consolidations, several national firms have opened Dallas offices in recent years. In early 2014, McGuireWoods, for example, opened an office at 2000 McKinney Avenue, starting with some former Patton Boggs partners. Perkins Coie (Ross Tower) and Holland & Knight (The Crescent), among others have also entered Dallas over the past few years.

Locke Lord2200 Ross AvenueRenewal176,057 s.f.

Jackson Walker2323 Ross AvenueRelocation 104,064 s.f.

Gardere2021 McKinney AvenueRelocation 109,000 s.f.



K&L Gates 65,000

Dentons 65,000

Strasburger & Price 60,000




Net rent

$19.50Taxes



2.5%

30.0% 12.0% 40.0%





31Locational preference: The majority of firms are located within Trophy and Class A+ properties Downtown (the Dallas CBD) and Uptown. A firm’s potential move will parallel any new, high-end development delivered in these submarkets; both the CBD's and Uptown's latest spec developments are significantly occupied by law firms.

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10%

Denver


Outlook

Challenges for law firms• Large blocks of space among well-located Trophy buildings continue to

decline due to oil and gas demand. • Credit enhancements are in greater demand as market tightens and

owners evaluate leasing options.• Owners of Trophy buildings have aggressively pushed rates based on

limited options, especially high-rise view space as well as space in LoDo.


• New construction is ramping up in the Denver CBD as three buildings remain under construction and at least three more will break ground within six months.

• Sublease dispositions have created additional space options for tenants, particularly in small to mid-size blocks.

Similar to many occupiers in the market, law firms are looking for opportunities to reduce real estate costs, while maintaining occupancy in view space in higher-quality buildings. Many firms are creating more efficient office layouts with smaller offices in hopes of avoiding construction costs when intra-office moves occur. Law firms are also reducing the number of sized offices from four to two, allowing for more offices and open space without expanding. Currently, most firms in the CBD are stable, with a few out in the market looking to expand their presence in Denver.

Denver has transitioned into an investor-heavy market, creating competition among building owners for tenants. Although the CBD is a landlord-favorable market, this competition has translated into higher tenant improvement and free rent packages. This has allowed tenants to create the aforementioned office space that will attract new talent and allow for more hires.

Holland & Hart555 17th StreetRenewal145,693 s.f.

BakerHostetler1801 California StreetRelocation 37,244 s.f.

Polsinelli1401 Lawrence StreetRelocation88,000 s.f.



Hogan Lovells 60,000

Moye White 45,000

Otten Johnson Robinson Neff & Ragonetti 30,000




Net rent

$20.10Taxes



3.0%

30.0% 8.0% 15.0%





11Locational preference: Firms have historically been found on the eastern side of Downtown Denver in the Midtown CBD and Uptown/East Side micromarkets; however, development opportunities in LoDo could entice firms in the coming years.

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Locational preference: While many of Detroit’s largest firms are located in the CBD, a significant portion of small-to-medium-size firms have chosen to locate in the northern submarkets of Bloomfield, Southfield and Troy.


11%

Detroit


Outlook

Challenges for law firms• Rent increases are forecasted in prime assets over the next 12 months.• Concessions will begin to taper off as leverage transitions away

from tenants.• New supply remains several years off given market fundamentals.


• Multiple redevelopment opportunities exist downtown.• Large blocks of space remain available across all size thresholds.

Real estate activity for Detroit area law firms was subdued this past year. The largest lease occurred downtown and involved a renewal of 53,000 square feet by the Kitch firm at One Woodward Avenue. The law firm has occupied a similar amount of space in the Class A property since 1988, although it relocated to higher floors in the tower in 2005. Meanwhile, just blocks away, significant renovations continued through the summer months at the offices of Miller Canfield. The law firm signed a long-term renewal for 70,000 square feet at 150 W Jefferson in March 2013.

In the suburbs, law firm activity over the last year was dominated by smaller firms, where the average lease size was just 11,000 square feet. Five law firm transactions were recorded over the last 12 months in the suburban submarkets, including three in Troy, one in Farmington Hills and one in Southfield. As with the recent lease signings downtown, size requirements in the suburbs have been stable over the last year, with the majority of law firms retaining a similar amount of space with their renewals or relocations, as technology has made legal space more efficient. Of the five transactions, three involved relocations as tenants looked to upgrade offices, while the other two transactions were renewals in top-quality assets.

Kitch1 WoodwardRenewal53,000 s.f.

Johnson Rosati Schultz Joppich27555 Executive Drive Relocation13,000 s.f.

Whiting Law 26300 Northwestern Renewal with expansion16,000 s.f.



N/A




Net rent

$12.05Taxes



2.5%

5.0% 10.0% 4.0%





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4%

Fairfield County


Outlook

Challenges for law firms• Continued leasing of UBS sublease space has driven net absorption of

200,000 square feet, reducing vacancy.• While transit center assets attract more tenant interest and broaden the

talent pool, this space commands a 20.0 percent rental premium.


• Many firms are downsizing and moving to New York City to be closer to the Millennial associate talent pool.

• Transportation options offer accessibility to New York City, but space remains at discounted rates.

There has not been any law firm activity since the start of 2014 in the Stamford CBD. When rents bottomed back in 2011 and 2012, many law firms exercised early extension and renewal options, which has resulted in a dearth of activity related to near-term lease expirations. That said, law firms that have recently taken space and those that are currently in the market have been leaning toward relocations rather than renewals. Right now there are three major law firms looking for space in Stamford CBD, which is an encouraging sign for a stabling economy. The competition for space is limited, so asking rents have remained relatively low for Stamford CBD.

n/a



Kelly Drye 35,000

Finn Dixon 30,000

Murtha Cullina 20,000




Net rent

$32.31Taxes



1.0%

9.5% 7.8% 18.0%





1Locational preference: The majority of law firms and practices are concentrated in the Stamford CBD/Railroad submarket, which has direct access to transit. Firms also dot the periphery of the CBD/Railroad in Stamford's other submarkets that are slightly farther from the transit hub, and offer more competitive pricing. The Greenwich CBD/Railroad is also a desired location for law firms as well, but space is priced at a premium.

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32%

Fort Lauderdale


Outlook

Challenges for law firms• Larger law firms are finding limited options for high-quality space, as

only three Class A properties can accommodate full-floor users with desirable views.

• Rapid rent growth over the previous year, particularly along Las OlasBoulevard, has reversed the flight to quality trend seen in the wake of the recession.

• The lack of planned or proposed multitenant office construction in the CBD will accelerate rent growth.


• With limited space, more large law firms may look for built-to-suit opportunities to save costs, similar to the strategy used by Kopelowitz Law this year.

• As the market transitions to a landlord-favorable one, smaller law firms with less need for proximity to the courthouses may look to quality suburban space to lower overhead.

The Downtown Fort Lauderdale office market is considerably tighter than one year ago, and the lack of quality available space is limiting real estate options for tenants circling the CBD, particularly where law firms are concerned. Over the previous year, many suburban firms, most notably Greenspoon Marder, migrated to the CBD, while space was still discounted, but with occupancy trending upward, and rents reacting in line, suburban firms are beginning to be priced out of the market. We expect the market to remain tight because only 325,000 square feet is set to expire in the next three years (much of which will likely be renewed); therefore, options will remain scarce.

This is especially true of large-quality blocks. Currently, only three quality blocks of 25,000 square feet or more are available, leaving leverage in the landlord’s favor. While national, credit-worthy firms are still desirable to landlords, creating leverage for firms, smaller boutique firms, which comprise the majority of legal tenants, will likely be priced out of Class A and Trophy space. With the tight conditions, together with the lack of new construction, law firms have started contemplating built-to-suit options.

Greenspoon Marder200 East Broward BoulevardRenewal with expansion64,500 s.f.

Burr Forman350 E Las Olas BoulevardRelocation9,500 s.f.

Lewis Brisbois110 SE 6th StreetRelocation14,500 s.f.



Ackerman Law 40,000

Greenberg Traurig 35,000

Shutts & Bowens 15,000




Net rent

$22.84Taxes



3.0%

36.2% 4.0% 14.3%





2Locational preference: Most major law offices tend to cluster in the Fort Lauderdale CBD due to the proximity to both the federal and county courthouses. Also, having an address in a Trophy asset along Las Olas Boulevard, the most prominent thoroughfare in the county, lends credibility and prestige.

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6%

Houston


Outlook

Challenges for law firms• CBD Class A vacancy is very low and currently rests in the single digits, so

options are very limited.• The overall market is still very much landlord favorable, with rental rates on

the rise and minimal concessions.• Law firms must be, at the earliest, the second tenant into a new

development due to credit status.


• Large blocks of space will become available in CBD and the Galleria, with new and proposed developments coming online over the next few years.

• New office product could force the market toward neutrality over the next few years.

As 2014 progresses, Houston’s economy and office market benefit from energy’s overall economic growth as well as a STEM-based job uptick. The result of this economic and employment strength is a tightening office market, with peak rental rates especially within the CBD, Galleria, and Greenway submarkets.

The above-mentioned Inner Loop areas serve as homes for the majority of Houston’s major law firms. With vacancy rates in all three areas hovering around single-digits, law firms looking to renew or enter these submarkets remain focused on gaining efficiencies in their layout and maximizing their available space. While new Trophy and Class A buildings such as 609 Main, 6 Houston Center and 1885 St. James are currently under way and could offer law firms the efficiencies they desire, these new buildings (and additional spec buildings poised to being construction) in the Houston market will arrive with effective rents poised to be substantially higher than existing Class A space.

With large blocks of existing Trophy and Class A space in these areas at a premium, the submarkets are expected to remain landlord favorable in nature in the near term. With concessions being tight and rental rates continuing to rise, law firms in the Houston market must continue a balancing act in terms of space, location, and rates when contemplating their lease needs.

Gardere1000 Louisiana StreetRenewal with expansion75,000 s.f.

Arnold & Porter700 Louisiana StreetNew to market30,000 s.f.

Akin Gump1111 Louisiana StreetRenewal69,000 s.f.



Bracewell & Giuliani 200,000

Coats Rose 45,000

Skadden 20,000




Net rent

$24.97Taxes



3.0%

5.0% 0.0% 20.0%





27Locational preference: Firms are found mostly in the CBD submarket. They are concentrated in Class A buildings with some of the most expensive rental rates in the city. Because of the lack of vacancy downtown, if national law firms were to move, they would consider moving to Midtown and the Galleria submarkets into new and proposed buildings.

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13%

Indianapolis


Outlook

Challenges for law firms• The Class A and Trophy buildings are subject to branding competition, as

there are several law firms within the same building. • Rents are rising and forecasted to rise ahead.


• Employment growth in office-using sectors and a stronger economy will allow for the formation of new practice groups.

• Improvements in amenities such as new parking garages, redevelopment projects and new modes of transportation in the CBD submarket will offer firms a new lifestyle downtown.

Leasing activity for the largest Indianapolis law firms slowed as expected in 2014 as large firms such as Ice Miller and Bingham Greenebaum Doll had already signed their leases in the past two years for a total of 206,000 square feet in the Class A CBD locations of One American Tower and Market Tower, respectively. The combination of these large leases and no new construction places the CBD with a limited supply of available blocks of space.

Indianapolis’ law firm industry has historically been dominated by firms practicing state and county government in addition to real estate law. However, this is starting to change with the growth of high-tech companies, as local firms are placing a greater emphasis on intellectual property rights. Looking ahead, Indianapolis’ CBD will continue to be attractive to legal tenants due to area amenities, such as high walkability indexes to retail, entertainment and convenient housing options.

Quarles & Brady135 N Pennsylvania StreetRelocation19,000 s.f.

Alerding Castor47 S Pennsylvania StreetRelocation7,000 s.f.

Brannon Sowers & Cracraft1 N Pennsylvania StreetRelocation7,000 s.f.



Hall Render 65,000

Woodhard, Emhart, Moriarty, McNett & Henry 30,000

Wooden & McLaughlin 20,000




Net rent

$12.25Taxes



3.0%

20.0% 5.0% 40.0%





8Locational preference: Indianapolis' law firms are primarily located in the CBD, with proximity to the Capitol, higher-quality amenities, and walkability being a huge draw to the area. However, there are some regional firms located in the Keystone submarket north of the CBD.

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5%

Long Island


Outlook

Challenges for law firms• Blocks of Trophy and Class A assets are declining, causing rental

rate increases. • Demand from other industries, including healthcare and financial services,

will further decrease Class A availabilities.• The lack of new development creates consistent demand for new

construction with a rental premium.


• There is quality Class B space in Central Nassau, creating leverage for cost-conscious firms.

• Central Nassau offers value in comparison to New York City, especially for firms looking to in-source non-revenue functions.

Employment in legal services in Nassau County grew 5.0 percent year-over-year in 2013. Nassau County legal services employment reached 12,337 in December 2013, the highest since 2007, according to the Department of Labor. General practice law firms are growing in Central Nassau, and seeking to expand health care and real estate practices.

In Central Nassau, large blocks of Class A space are decreasing, thus more than half of law firm leases signed in the past year were renewals. In Central Nassau, specifically Garden City, firms are expanding and acquiring smaller practices. In Garden City, firms expanded by approximately 25.0 percent in the past year. Firms, meanwhile, are also renewing leases at Trophy RXR Plaza in Uniondale at a premium to comparable spaces in Central Nassau.

Moritt Hock & Hamroff400 Garden City PlazaRenewal with expansion25,600 s.f.

Bond, Schoenick & King 1010 Franklin AvenueRelocaton14,000 s.f.

Goldberg Segalla200 Garden City PlazaRelocation20,233 s.f.



Stein Wiener & Roth 10,000

Edelman, Krasin & Jaye 10,000



TI allowance ($ p.s.f.)** Free rent (months)**$25.33 5.6

Net rent

$15.00Taxes



3.0%

6.0% 10.0% 15.0%





2Locational preference: Firms in Central Nassau are clustered on Franklin Avenue in Garden City, which is in close proximity to major highways, transit and the county seat. Firms are also located at Trophy buildings in Uniondale that command a premium to comparable spaces in Central Nassau. Limited new development may shift law firms to adjacent Jericho in Eastern Nassau.

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Locational preference: Los Angeles firms are concentrated in the Downtown CBD near the courthouses. Specialized practice groups, generally catering to media and entertainment companies, are located close to their clients on the Westside in Century City. Ahead, some firm tenants electing to be closer to tech and entertainment clients will migrate to more non-traditional low-rises in Santa Monica and Playa Vista.


14%

Los Angeles


Outlook

Challenges for law firms• A diminishing number of Los Angeles-headquartered companies is

impacting demand for corporate litigation services.• There is reduced ownership competition as Downtown's top three landlords

control 58.0 percent of Class A availability.• There is identifying Downtown options with more efficient floor plates, given

a lack of new product.


• There are numerous options for tenants seeking large blocks of space in Class A Downtown assets.

• Delivery of the Wilshire Grand will offer a generational opportunity to be in a new Downtown Trophy asset with building-top signage rights.

• Return of construction on the Westside offers firms the opportunity to refresh their image with build-to-suit space.

The ongoing trend of corporate headquarters relocations from Southern California continues to negatively impact the growth of the law firm sector in Los Angeles. Nevertheless, the growing number of technology start-ups on the Westside, some of which will eventually become acquisition targets or pursue IPO strategies, will create additional demand for legal services. The growing interplay between technology and the entertainment industry is expected to boost practices specializing in digital rights management (DRM). Practice groups focused on international law will also see increased demand for services driven by Los Angeles’s growing linkage to Asia, thanks to expanded capital activity here. Downtown’s close proximity to the federal and state courts will continue to make the submarket a vital location for law firms specializing in complex litigation, although rightsizing has negatively impacted the vacancy levels in the CBD market.

In reviewing transaction trends of Los Angeles law firms, the average tenant occupies approximately 14,000 square feet and signs a 12-year deal. Within the next three years, 62.0 percent of LA law firm leases will expire, which will provide a potential shake-up in occupancy across law-firm-weighted markets. Although a majority of these tenants are anticipated to sign renewals (as recent trends would tend to indicate), some firms will commit the out-of-pocket capital costs necessary to relocate and move into more efficient facilities. With modest economic growth forecasted over the next few years, the Los Angeles office market is expected to turn landlord favorable in 2015, which may further drive firms to renew in place rather than opt for a costly relocation.

Hinshaw & Culbertson11601 Wilshire BoulevardRenewal20,060 s.f.

Dechert633 W 5th StreetRenewal17,094 s.f.

Anderson McPharlin707 Wilshire BoulevardRelocation18,525 s.f.



Munger & Tolles 160,000

Irell & Manella 100,000

O'Melveny 50,000




Net rent

$21.49Taxes



4.0%

5.2% 20.3% 30.0%





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17%

Miami


Outlook

Challenges for law firms• Contiguous Trophy space with prime views remains extremely limited.• Space properly designed to accommodate new workplace standards is in

demand, but lacking in availability.• Concessions are on the decline for both new deals and renewals.


• New construction is underway at Brickell City Centre.• New assets and upgrades from existing product offer greater efficiencies,

upgraded finishes and increased amenities.

Upholding its standing among the most prolific office users, CBD law firms led all industry sectors in leasing. Totaling 346,000 square feet, transactions involving law firms accounted for 41.0 percent of all CBD deals. These were among the largest occupiers, with two-thirds of this activity consisting of leases in excess of 20,000 square feet. Half of the top 10 transactions were executed by top-performing national AmLaw 100 and 200 firms. Miami’s top two active requirements, Ackerman Senterfitt and Hughes Hubbard, also rank among the same national giants.

CBD market conditions follow Miami’s overall fundamentals: declining vacancy with marginal sublets available thanks to new occupancy gains and leasing activity. This coincides with lower unemployment and higher job gains. Miami led all major U.S. markets with more than 20,000 people employed in legal services, growing 3.7 percent over the last 12 months, employing 22,500 people.

A challenge facing both tenants and landlords is that the leasing of premier CBD spaces has left relatively fewer options for high, full-floor offices with commanding, unobstructed views. Enticing tenants to less-attractive, view-challenged spaces is at the forefront of creative marketing efforts for Trophy landlords.

Shutts & Bowen200 S Biscayne BoulevardRelocation69,155 s.f.

GrayRobinson333 Avenue of the AmericasRelocation35,400 s.f.

White & Case200 S Biscayne BoulevardRenewal with contraction58,400 s.f.



Akerman Senterfitt 120,000

Hughes Hubbard 25,000

Broad and Cassel 20,000




Net rent

$22.23Taxes



3.0%

13.0% 5.1% 28.0%





8Locational preference: Miami’s CBD is comprised of two submarkets, Brickell and Downtown. The vast majority of firms occupy space within the Downtown sector of the urban core.

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Locational preference: The Twin Cities' major firms are concentrated in the Minneapolis CBD, including the majority of firms occupying 50,000 square feet or more of. The CBD is home to the Hennepin County courthouse and is the business epicenter of the Twin Cities.


11%

Minneapolis


Outlook

Challenges for law firms• Landlords continue to press on rents in high-profile Trophy properties.• Fit-out costs are increasing.


• A retreat to value, build-to-suits and rightsizing by some downtown tenants has resulted in an increase in large available Trophy blocks.

• Mid-tier Class A and Class B buildings with lower asking rates and some larger availabilities provide additional options for value-driven users.

• A decline in active requirements in the Minneapolis CBD reduces competition for space.

Leasing activity among law firms has been quite strong over the past year, with more than 650,000 square feet of lease transactions executed in the Minneapolis CBD. Current active requirements for law firms have been reduced considerably as a result, and while some sizeable requirements do remain, a decline in active office requirements for tenants across all industry types, not just legal tenants, is reducing the competition for space in the Minneapolis CBD. This is especially true when factoring in the increase of large available Class A blocks resulting from build-to-suit activity, rightsizing, and relocations by value-driven tenants to lower-cost options. Opportunities for large tenants remain more limited, however, in upper floors and in properties in close proximity to Nicollet Mall.

The local legal community has experienced significant merger and consolidation activity in the past few years as law firms look to fill gaps in practice areas, increase efficiencies and expand into new markets with strong economies and business opportunities. One of the more unique examples of consolidation is Boston-based Fish & Richardson’s recent decision to create a centralized, administrative hub in its Minneapolis office. Relatively affordable rents, a talented workforce and a high quality of life were factors in the decision to concentrate 80 positions to Minneapolis from multiple offices throughout the country.

Dorsey & Whitney50 S 6th StreetRenewal with contraction250,000 s.f.

Briggs & Morgan80 S 8th StreetRenewal with contraction116,827 s.f.

Robins, Kaplan, Miller & Ciresi800 LaSalle AvenueRenewal with contraction159,000 s.f.



Leonard, Street & Deinard 150,000

Lindquist & Vennum 100,000

Winthrop & Weinstine 90,000




Net rent

$17.24Taxes



2.0%

7.8% 10.0% 37.4%





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Locational preference: The majority of firms in Manhattan are located in Grand Central and the Plaza District, where Grand Central Terminal and the Metro North Railroad are easily accessible. In an effort to find more efficient, lower-priced space, firms are relocating westward within Midtown to new construction and Downtown where pricing for Class A space is on par with Class B space in Midtown.


11%

New York


Outlook

Challenges for law firms• Most new construction in Midtown will not be delivered until 2018 or later,

significantly limiting the supply of new, efficient space available to firms.• Landlords are beginning to push back, lowering concessions and

increasing rents as supply tightens.• If firms want new construction, they will have to move westward or

Downtown; the delay of the proposed Midtown East rezoning pushes off any new construction in the Grand Central corridor for the foreseeable future.


• Geographically diverse workforce opens opportunity for relocation outside traditional submarkets.

• Newer, lower-priced space on the west side and Downtown provide opportunities to reduce real estate footprints and costs.

• The Vanderbilt corridor rezoning provides the opportunity for new construction near Grand Central, including the proposed One Vanderbilt.

Leasing activity among major law firms year-to-date has resulted in three committing to a lease greater than 100,000 square feet, two relocations and one renewal—compared with four renewals larger than 100,000 square feet at this time last year. During the second quarter, White & Case signed the largest lease year-to-date, a 440,000-square-foot relocation four blocks north to 1221 Avenue of the Americas from 1155 Avenue of the Americas.

While Grand Central Terminal remains a pull to many established firms, it has become less so in recent years as market dynamics have shifted and employee commuting patterns have changed. The majority of partners are no longer commuting from Westchester and Connecticut, and the battle for associate-level talent has reduced the need to have offices near the Metro North Railroad terminal and the east side subways. Combined with a drive for efficiency, law firms have increasingly shifted office searches west and Downtown, where newer, lower or comparatively priced space is available. Some of the early pioneering law firms that moved into Times Square in the late 1990s are now opting to consider locations farther westward or Downtown as their leases expire.

White & Case1221 Avenue of the AmericasRelocation440,000 s.f.

Paul Hastings200 Park AvenueRelocation190,914 s.f.

Weil Gotshal & Manges767 Fifth AvenueRenewal390,000 s.f.



Skadden TBD

Kirkland & Ellis 500,000

Milbank 350,000



TI allowance ($ p.s.f.)** Free rent (months)**$50.05/$18.40 12/5.2

Net rent

$47.96Taxes



1.5%

14.3% 2.7% 26.7%





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4%

Oakland


Outlook

Challenges for law firms• Quality blocks of space are depleting in Class A space and there is no

new construction.• The market is still in transition and there is a lack of desirable amenities

around the Lake Merritt area.


• There are generous concession packages relative to surrounding Bay Area markets.

• Downsizing provides space opportunities for other tenants to expand.• The area is relatively affordable compared with other Bay Area markets.

A majority of the law firms practice litigation with an emphasis in employment, labor, benefits and mediation disputes. However, law firms represent a small portion of active tenants as well as the tenant make-up in the CBD market. The downtown market is in a transitional period, causing a majority of law firms to follow one of two trends: downsizing or relocation to another Bay Area market.

Leasing activity has picked up in desirable Class A buildings and in turn, an increase in rental rates and depletion in available space has caused many law firms to downsize in response to cost concerns and perceived lack of amenities. Furthermore, law firms are looking to East Bay suburbs where rental rates for desirable Class A space are lower and BART is still easily accessible. Additionally, some law firms are consolidating into one office location, moving out of their Oakland office and consolidating in either San Francisco or the East Bay suburbs.

Mullen & Filippi555 12th StreetRenewal8,636 s.f.

Selvin Wraith Hallman505 14th StreetRenewal6,148 s.f.

Beles & Beles1 Kaiser PlazaRenewal6,616 s.f.



Cooley 30,000

GBDH Legal 10,000




Net rent

$12.00Taxes



3.0%

8.0% 4.0% 15.0%





1Locational preference: The majority of firms are located between 11th Street and 16th Street in Downtown Oakland. Law firms are attracted to top-floor space in a select few Class A buildings for views of the San Francisco Bay. In addition, law firms are concentrated by two BART stations: 12th Street-City Center or 19th Street.

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8%

Orange County


Outlook

Challenges for law firms• Options are evaporating in high-quality office towers located in the

popular submarkets.• With growing demand for quality space in Irvine Spectrum and Newport

Beach, whispers of speculative construction are becoming more common.• A sharp increase for Class A rents is expected, particularly in Irvine

Company-owned towers.


• As larger firms continue to downsize due to more efficient space layouts, opportunity for smaller local firms to expand into prime Class A buildings is increasing.

• Options for Class A space in Central County are still prevalent, holding back rent increases.

Throughout 2014, the key word for legal tenants appears to be efficiency. Although law firms are one of the most prolific occupiers of real estate in Orange County, a large number of firms are moving toward modern and efficient layouts. In addition to this, law firms are continuing the trend of attorney and staff cutbacks. As a result, many law firms are reducing their overall real estate footprint. As this trend continues in 2014 and into 2015, an opportunity has been created for smaller local firms to expand into premier Class A buildings to backfill this space. This being said, competition for space among larger firms is poised to increase in the next year as the amount of full floors in Class A towers in the Airport Area market is dwindling.

This lack of availability has tempered movement from new law firms entering the market, as a majority of the lease transactions were renewals. However, comparable options in the Central County market’s Class A market are still plentiful and will become an alternative to law firms that are unwilling to pay a soon-to-be premium for locations in Irvine, Costa Mesa, and Newport Beach. It is highly unlikely that the level of demand from the Orange County law firm sector will spark any new construction in the near future. Law firms will find more competition from the county’s other industries, like financial services and technology firms, which are expected to be primary drivers of activity in 2014 and 2015.

White Nelson Diehl Evans2875 Michelle DriveRenewal22,000 s.f.

Giovanniello & Michels1 Pointe DriveNew to market7,532 s.f.

Cooksey Toolen,Gage,Duffy & Woog535 Anton BoulavardRenewal10,512 s.f.



Haynes and Boone, LLP 26,000

Sedgwick 15,000




Net rent

$14.77Taxes



3.0%

25.0% 13.5% 25.0%





9Locational preference: Seeking the highest-quality office space, Orange County's most prominent law firms are typically located in Newport Beach, Central Irvine and the towers in Costa Mesa surrounding South Coast Plaza. Although there is currently minimal availability, South County's Irvine Spectrum area has become one of the more popular areas of the market. The submarket has an abundance of amenities in close proximity and is easily accessible to the residential neighborhoods in South County and Airport Area.

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15%

Philadelphia


Outlook

Challenges for law firms• Landlord leverage is diversifying, with Class A rent growth exceeding

Trophy growth year-to-date.• There is a lack of quality availabilities larger than a full floor.• Net-new inbound demand is increasing competition for space.


• New developments will spur existing and new Trophy availabilities.• Investors continue to look to existing, underperforming Class A assets for

repositioning projects.• Availabilities for small-sized law firms (fewer than 10,000 square feet)

remain abundant.

The Philadelphia CBD marketplace has continued to evolve in 2014. While tenant demand profiles have shifted from large- to mid-sized users, sub-6.0 percent Trophy vacancy has positioned Class A landlords to benefit from the Trophy rental growth experienced in 2013. Annualized Class A rent growth of 5.3 percent in Market Street West in the second quarter surpassed comparable Trophy figures, which grew at 3.3 percent year-over-year. Continued leasing momentum from mid-sized law firms has facilitated landlord leverage. While Pond Lehocky, HangleyAronchick and Chartwell Law finalized Trophy deals, transactions with Schnader Harrison and Klasko Rulon were finalized at top-tier Class A assets. Now, the market faces a near-term supply-demand misalignment between quality availabilities and tenant demand.

Despite this current deficiency, new deliveries, repositioned assets and pending rightsizing will bring select new availabilities for law firms seeking space. While Comcast retains an option to occupy the remainder of its new Trophy tower, FMC Tower at Cira Centre South will bring new Trophy product to the market, and a recent uptick in CBD investment sale activity will bring fresh capital and vision to assets on the market for sale. Given currently tight market conditions and potential near-term softening, tenants will continue to enter the market more than three years ahead of lease expiration.

Rawle & HendersonWidener BuildingRenewal69,420 s.f.

Pond LehockyOne Commerce SquareRelocation60,000 s.f.

Schnader Harrison1600 Market StreetRenewal with contraction67,000 s.f.



Stradley Ronon 100,000

Obermayer Rebbman 80,000

Dechert 50,000




Net rent

$20.09Taxes



3.0%

20.0% 7.0% 10.0%





23Locational preference: The majority of Philadelphia's law firms are located in the CBD's Market Street West submarket. This location provides easy access to abundant amenities and immediate proximity to the city's concentration of professional services companies.

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14%

Phoenix


Outlook

Challenges for law firms• Availability of Class A space is shrinking.• Rents are beginning to escalate in the tightest submarkets, with firms

seeing dwindling opportunities to take advantage of historically-low rates.• Landlords are beginning to limit free rent and concessions; therefore, it will

cost law firms more to establish new, modern-space layouts.


• Despite dwindling Class A options in Phoenix, plenty of high-quality second-generation space is available for law firms, especially within the high-rises in Midtown.

• New construction breaking ground in Tempe will provide an opportunity for firms looking to open satellite offices.

Legal services have proven to be a lagging sector of Phoenix’s slow recovery. As in many markets around the country, the last few years have seen many local law firms rightsize to smaller real estate footprints. Driven by cost savings, Phoenix has seen a dramatic drop in the share of office space that is occupied by law firms. In 2014, this trend is starting to slow as most firms have already moved into their smaller spaces. As the economy continues to improve, the trend is shifting toward creative uses of existing space.

As the overall economy continues to improve, the next phase of Phoenix’s recovery will be driven by traditional office users such as law firms. Legal employment growth will gain traction as new attorneys and clerks are hired to meet the expanding need of new and growing businesses in Phoenix. Law firms are trying to stall the increased costs associated with expanding into more space by exploring more efficient layouts and continuing to reduce the size of offices and support spaces. Despite many second-generation spaces still available across the Phoenix CBD, law firms are more prone to simply renew their current leases and reorganize, given the very high cost of tenant improvements in new space.

Wilkes & McHugh2355 E Camelback RoadRenewal with contraction6,430 s.f.



Jones, Skelton & Hochuli 50,000

Buchalter Nemer 20,000

Campbell, Yost, Clare & Norell 15,000




Net rent

$11.35Taxes



3.0%

10.0% 15.0% 15.0%





11Locational preference: The majority of law firms have located within the Downtown and Midtown submarkets because of their centralized location and proximity to courthouses. A few firms are beginning to migrate outside of the core to neighboring submarkets such as the Camelback Corridor to capitalize on more modern, but still affordable spaces.

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12%

Pittsburgh


Outlook

Challenges for law firms• Rent increases are forecasted in prime assets over the next 12 months.• Concessions will continue to taper off as market fundamentals tighten.• Limited large blocks will hinder law firm with active requirements greater

than 50,000 square feet.


• Additional office product is in the development pipeline downtown.• A burgeoning shale industry will provide substantial revenue growth

opportunities for firms.

The Marcellus shale industry has no doubt had a significant impact on the region’s economy, and in particular, the legal sector. The Southpointe submarket, located roughly 20 miles south of downtown Pittsburgh, is the hub of oil and gas activity in the Appalachia region thanks to its proximity to drill sites as well as the Pittsburgh International Airport. Over the past few years, more than 50 energy-related companies have rushed to the area, including Steptoe & Johnson law firm (not to be confused with the Washington, D.C.-based firm of the same name). Steptoe & Johnson is currently in the midst of its second expansion since opening an office in Southpointe in 2010. By October, the company plans to double its offices from 12,000 square feet to 24,000 square feet.

Also expanding its footprint in the Southpointe submarket is Burleson LLP, a full-service law firm devoted primarily to the oil and gas industry. Burleson recently relocated from a 17,000-square-foot office in the first phase of Southpointe to a new 23,400-square-foot office in the Southpointe Town Center. The new location puts the firm within walking distance of established oil and gas clients Range Resources and Noble Energy. Burleson opened its Pittsburgh location in late 2009 with roughly 1,500 square feet and four attorneys. In less than five years, it has grown to 40 attorneys, expanding its original office space three times before relocating to the newly built Southpointe Town Center.

Steptoe11 Grandview CircleRenewal with expansion24,000 s.f.

Sherrard, German & Kelly535 Smithfield StreetRelocation23,000 s.f.

Burleson1900 Main StreetRenewal with expansion23,400 s.f.



N/A




Net rent

$17.99Taxes



2.0%

10.0% 15.0% 15.0%





11Locational preference: The majority of Pittsburgh law firms are located along the downtown signature streets of Grant and Liberty Avenue. Of the top 31 Pittsburgh law firms, all but two are headquartered in this micromarket. In recent years, a growing number of them have also established satellite offices in the Southpointe submarket to accommodate business related to the Marcellus shale industry.

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Locational preference: Portland area law firms have gravitated toward the central part of the CBD for the most part, in close proximity to the courthouses and majority of amenities. There have been a few law firms that have moved farther west and north, as those areas have become more developed.


7%

Portland


Outlook

Challenges for law firms• Rising rents in the CBD will make value options sought by smaller to

mid-sized firms difficult to secure.• Securitization remains an issue for firms with landlords skeptical of

committing to large tenant improvements without some form of securitization, especially given growing demand outside of law firms.

• Competition with technology firms for the most sought-after spaces will only increase.


• Expanding small- to mid-size firms can now backfill space left by larger firms who are moving into new and updated spaces.

• Robust redevelopment activity will increase the amount of functional space for small- to mid-sized firms.

• Park Avenue West and Pearl West will add large blocks of space when they deliver in 2016.

The market’s largest law firms—mainly national and regional firms—have all signed leases and rightsized within the past several years, leaving the bulk of market activity to small- and mid-sized local and regional firms. Although large blocks of Class A space in the CBD are scarce, smaller firms with requirements smaller than 20,000 square feet still have a number of full-floor options available to them, including backfilling larger firms’ spaces. Smaller firms are also competing for talent and becoming more efficient, but their space needs are focused on value in addition to function.

While efficiency is also a trend with smaller firms, square footage gains are minimal and often do not lead to space give-backs. A full-floor firm will not gain much economically by shrinking 10 to 15 percent, as landlords will be unwilling to break up a floor and will price the renewal to offset this loss. Firms will be forced to consider relocation to smaller floor plates, but the cost and disruption of moving will likely negate any rate or square footage gains. So, while law firms will have a few more options to consider, landlords are not likely to get too aggressive on rates; the result is that market leverage remains fairly balanced.

Stoel Rives750 SW 9th AvenueRelocation131,906 s.f.

Barran Liebman601 SW 2nd AvenueRenewal16,400 s.f.

Perkins Coie1120 NW Couch StreetRenewal59,809 s.f.



Farleigh Wada Witt 18,000

Landy Bennett Blumenstein 17,000

Troutman Sanders 15,000




Net rent

$18.82Taxes



3.0%

5.2% 1.0% 13.0%





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7%

Raleigh–Durham


Outlook

Challenges for law firms• As rents continue to increase, firms renewing their leases will pay a

premium for spaces that were cheaper a year ago.• Law firms in second-generation offices will find it challenging to make

facilities attractive for talent recruitment and staff retention.


• Available space at Wells Fargo Tower and Charter Square will provide tenants with multiple Class A options in the CBD.

• Fewer firms are touring the market compared to technology companies, yielding limited competition between law firms looking for new spaces.

Several of Raleigh-Durham’s largest law firms will see their leases expire over the next 24 months. Firms like Womble Carlyle, Moore & Van Allen, Ellis & Winters and Hedrick Gardner have preleased space in Class A buildings that are currently under construction. Charter Square, a premier Class A project in Downtown Raleigh, broke ground this year, with Womble Carlyle as its anchor tenant. Charter Square is the first multi-tenant office building in Downtown Raleigh since 2008.

Flight to quality among law firms is a prominent trend in the market. Although new projects command a higher rent premium, these brand-new office buildings will provide easily reconfigurable spaces, which will allow firms to rightsize their office footprint based on the number of attorneys and support staff.

With Parker Poe and Womble Carlye both set to vacate close to 117,500 square feet in the Wells Fargo Tower in Downtown Raleigh, availability of quality Class A space in the CBD is no longer an issue for tenants looking for new space. As law firms typically sign long-term leases, landlords continue to offer attractive tenant improvement packages, free rent and competitive rates to lease vacant spaces. Multiple buildings will be delivered in the next 24 months, concessions and rents will vary with individual buildings and opportunistic law firms that are touring the market will leverage the current market conditions and sign new leases well in advance of their lease expirations.

Womble Carlyle555 Fayetteville StreetRelocation43,870 s.f.

Hedrick Gardner4131 Parklake AvenueRelocation20,250 s.f.

Ellis & Winters4131 Parklake AvenueRelocation20,250 s.f.



Yates, McLamb & Weyher 15,000




Net rent

$17.79Taxes



3.0%

36.0% 5.0% 33.0%





3Locational preference: The majority of firms are located in the Class A office towers on Fayetteville Street in Downtown Raleigh. Some regional firms are located in the suburban submarkets of Cary, Glenwood/Creedmoor, RTP/RDU and West Raleigh.

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14%

Richmond


Outlook

Challenges for law firms• There are limited large blocks in the CBD's first-generation supply.• New construction rates carry a substantial premium over the

existing inventory.• Older floorplates posing challenges for efficient floor deigns.


• Anticipated relocations and downsizes in 2015 will open a block larger than 200,000 square feet.

• Downsizing within some of the CBD's Trophy assets have placed discounted sublet space on the market.

• Concession packages remain strong in the CBD due to limited new leasing activity.

After a wave of renewals created by Richmond’s largest law firms in 2013, inflated availability rates in the CBD have recovered modestly due to an influx of new leasing volume created by new-to-market firms and expansions. Additionally, the repurposing of historical office buildings Downtown increased demand for Class B space, which also fueled year-to-date leasing volume. The largest availability remains McGuireWoods’ 244,000-square-foot space at One James Center, the only contiguous block of Class A space available larger than 100,000 square feet in the CBD. This block will not be vacated until the second quarter of 2015 when McGuireWoods relocates to their new tower currently under construction, Gateway Plaza.

Larger firms seeking modern space Downtown will be limited to new construction, which also carries two-year occupancy delays due to construction timetables and a 30.0 percent premium over the average Class A rates in the CBD. While the scarcity of Class A blocks poses challenges for large firms, small- to mid-sized firms have been able to leverage multiple relocation options for significant concession packages.

McClandish Holton1111 E Main StreetRenewal with expansion33,822 s.f.

Kutak Rock1111 E Main StreetRenewal11,374 s.f.

Kaplan, Voekler, Cunningham & Frank1401-1405 E Cary StreetRelocation16,500 s.f.



LeClairRyan 70,000




Net rent

$17.06Taxes



2.5%

30.0% 5.0% 15.0%





5Locational preference: Firms are concentrated in the CBD, particularly the southernmost boundary, which offer panoramic views of both the James River and the downtown skyline. This area also consists of the newest inventory in the CBD, as well as unimproved sites for new construction. However, McGuireWoods’ new headquarters—Gateway Plaza—has reduced the number of viable developments sites to two options, both located on the southern border of the CBD.

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Locational preference: The majority of law firms in Sacramento are concentrated in the Capitol Mall district, along Capitol Mall between 3rd and 7th Street. The Capitol Mall will remain the primary market due to tenant migration closer to the new Entertainment and Sports Complex expected following its completion in 2016.


11%

Sacramento


Outlook

Challenges for law firms• Larger firms looking to relocate or expand in the near future will face

landlord-favorable negotiations with only a handful of Class A blocks available downtown.

• A steadily improving local economy and renewed interest in the CBD will translate into increased competition for Trophy space.

• Many firms are looking to hire, but a limited local labor pool presents challenges.


• The new Entertainment and Sports Complex and related redevelopment projects will create a more attractive, amenity-rich downtown core.

• Marginal rent growth is expected in the near future; rates will remain affordable, especially compared to neighboring Bay Area markets.

• Smaller tenants looking to relocate to second-tier Class A space still have a number of options.

Downtown law firms have been relatively quiet in 2014, following a flurry of activity over the past 24 months. In 2013, historical peak vacancy and below average rental rates for Class A office space allowed firms the leverage to upgrade their space and negotiate generous lease terms.

While the share of downtown space occupied by firms remained fairly unchanged year-over-year, lateral movement of lawyers has altered the industry landscape. One of Sacramento’s largest firms, Downey Brand, lost over 40 lawyers, who have since gone on to establish new boutique firms. Passage of the Affordable Care Act has given way to a number of these new boutique firms reorienting focus more heavily toward health care practice.

The Entertainment and Sports Complex and related redevelopment projects will bring much needed life to the lower J-K-L Street corridor. Increased demand may not be immediately on the horizon, but a revitalized downtown core with a greater selection of amenities and housing could help attract the talent downtown Sacramento firms are looking for.

Delfino Madden500 Capitol MallNew to market6,231 s.f.



Murphy Austin 25,000

Churchwell White 10,000




Net rent

$21.08Taxes



2.5%

8.4% 6.5% 30.0%





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Locational preference: Law firms are primarily concentrated in Del Mar Heights, Downtown and UTC, with Mission Valley a less popular, but still viable, submarket for some firms. Percent of market

occupied by law firms

7%

San Diego


Outlook

Challenges for law firms• Firms are losing leverage as the market transitions to a landlord-

favorable environment.• Firms are seeing few large blocks of available space.• Tenant improvement costs are higher with the changes to lighting

requirements under new California energy standards that took effect earlier in 2014.


• The Irvine Company's 306,000-square-foot One La Jolla Center is set to complete in 2015, which will increase inventory in the supply-constrained market.

• In spite of rising rents in the submarkets with concentrations of law firms, Downtown still has great opportunities for more affordable view space.

Law firms in San Diego continue to relocate from Downtown to Del Mar Heights and UTC because of close proximity to executive housing and the clustering of specific industries, which drive demand for their services such as technology, life sciences and finance. Firms with a large local litigation practice prefer to be located Downtown due to the proximity to State and Federal courts.

Thanks to consistent demand for space in the submarkets popular among legal tenants, asking rents continue to increase, with Class A asking rents 15 to 30 percent higher than the region overall. Additionally, as these submarkets transition to a landlord-favorable environment, tenants will have less leverage and increased competition for space, with diminishing concessions and tenant improvement allowances. With very few large blocks of space and only one speculative building under construction, build-to-suits (BTS) are one of the few options for larger law firms, as seen with the Latham & Watkins 70,000-square-foot BTS completed this year.

Due in part to the tightness of the market in these areas, a number of law firms that signed 8- to 10-year leases at the height of the market (2004–2007) have recently negotiated lease restructures, opting to stay put and in some cases, minimizing their space commitment.

Morrison Foerster12531 High BluffRenewal with contraction59,328 s.f.

Perkins Coie11988 El Camino RealRenewal with expansion33,052 s.f.

Sheppard Mullin12275 El Camino RealRenewal54,933 s.f.



Jones Day 50,000

Pillsbury 40,000

Allen Matkins 30,000



TI allowance ($ p.s.f.)** Free rent (months)**$20.65/$14.53 6.9/5.6

Net rent

$19.17Taxes



3.5%

5.0% 7.5% 11.0%





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Locational preference: The vast majority of law firm tenants prefer to office in high-profile buildings concentrated in or bordering the North Financial District, where there is a large concentration of premium Class A office product. Firms, especially within the AmLaw 100, also prefer to be located on higher floors with quality view-space.


7%

San Francisco


Outlook

Challenges for law firms• There are only seven blocks of space larger than 100,000 square feet

available in the market, including buildings under construction.• The significant growth of the tech industry has fueled 80 percent rent

growth, presenting a difficult negotiating environment for firms.• Despite 4.5 million square feet of new construction in the market, 70

percent has been preleased, leaving very little new supply and asking rents that are 5 to 77 percent higher than existing Class A space.


• As new developments are delivered and occupied, there will be new opportunity in second-generation space being vacated.

• The continued demand and shift south toward the South Financial District will present firms with greater negotiating leverage in the North Financial District, which has long been a center for firms.

Despite an expanding economy, growth in the legal industry has been stagnant with virtually no change in employment over the last 20 years. While San Francisco remains a significant hub for AmLaw 100 firms, the competitive leasing environment that has arisen as a result of the rapidly expanding technology industry has been challenging for even the most prominent of law firms. With rental rates nearly double those in 2010, law firms are challenged to find quality space in a market where virtually all other non-technology industries are also competing for good deals.

There do remain pockets of opportunity, however. As much of the competitive demand in the market is focused on new construction and space south of Market Street, the North Financial District, long the preferred area of law firms, is experiencing waning demand and thus slightly better negotiating leverage. Leases signed by law firms in 2014 were 8.0 percent lower than the overall average asking rate and nearly entirely completed in the North Financial District. Though availability of large blocks remain a challenge for law firms with leasing requirements between now and 2016, trends in workplace efficiencies are allowing law firms to revise their space needs moving forward. As more technology companies explore San Francisco as a viable base for operations and growth based on demographics and industry clusters, law firms, which have seen flat headcounts of late, will have the opportunity to see their revenue and headcount expand in the city further.

Winston & Strawn101 California StreetRenewal with expansion52,235 s.f.

Dechert1 Bush StreetRelocation17,044 s.f.

Munger, Tolles & Olson560 Mission StreetRenewal37,171 s.f.



Cooley 125,000


Arnold & Porter 100,000




Net rent

$40.79Taxes



3.0%

10.0% 5.5% 30.0%





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Locational preference: The majority of firms are located in the Seattle CBD, Belltown/Denny Regrade, Pioneer Square and Bellevue CBD submarkets of the Seattle office market. Firms gravitate to buildings within the core with views of Puget Sound, close-in amenities and a dense urban atmosphere.


12%

Seattle–Bellevue


Outlook

Challenges for law firms• As the market approaches 10 percent vacancy and momentum continues

shifting to landlords, significant rent growth is on the horizon.• Due to a lack of available creative space in smaller tech submarkets, tech

companies are increasingly migrating to the CBD, which means competition for premier Class A space is heating up.

• New construction could potentially offset rental rate increases over the next few years.

Opportunities for law firms• Several developers are looking for tenants to prelease space so that they

can kick off massive proposed projects.• Deal structure is growing increasingly important in the market, as rapid

growth among technology firms requires more lease flexibility. Law firms that are stable, better equipped to forecast their office needs and seeking traditional lease structures, may become more desirable to landlords.

• Many firms are rightsizing, creating built-out space opportunities for other firms seeking cost-effective subleases.

Law firm leasing activity in 2014 has been slower in Seattle than in recent years. While there are a handful of small, and mid-sized firms currently in the market for space, there are no major national or regional firms seeking 50,000 square feet or more; those tenants either recently renewed or have several years of term remaining on their leases.

High-tech industry growth is both a gift and a curse for local law firms. Market vacancy has been declining and is approaching the tipping point for substantial rent growth, driving up real estate costs for area law firms. Tech firms’ preference for Lake Union and North CBD has led landlords in the southern portion of the CBD and South Seattle to get very aggressive with rates and concession packages, offering an opportunity for law firms in those areas. With competition for tenants intensifying, many of Seattle’s downtown buildings are either in the process of, or have recently updated their lobbies and significantly expanded their amenity sets. While these improvements are to appeal to tech tenants, the benefits are shared by all. Law firms may not necessarily place a premium on bike storage, but they surely appreciate access to top-notch athletic facilities, updated conference rooms and outdoor spaces. Firms that are receptive to the idea of locating in the South CBD will find that there is premier space available at an affordable price.

Christensen O'Connor Johnson Kindness1201 3rd AvenueRelocation28,416 s.f.

Cozen O'Connor999 3rd AvenueRelocation21,535 s.f.

Carney Badley Spellman701 5th AvenueRenewal24,000 s.f.



Miller Nash 40,000

Hillis Clark Martin & Peterson 30,000

Lowe Graham Jones 25,000




Net rent

$24.40Taxes



3.0%

30.0% 5.0% 30.0%





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20%

Silicon Valley


Outlook

Challenges for law firms• There is a lack of Class A office product in the market, especially for firms

seeking more than 20,000 square feet.• Rents are rising for existing and future availability as a result of a landlord-

favorable market; new development is likely to stall due to more stringent planning requirements.

• There is increased competition for space from other tenants, including venture capital and private equity firms who are willing to pay premium rents for well-located space.


• Class A space is expected to come online in the next 12 to 18 months as several Research Park tenants will be vacating space.

• New development is expected to break ground in Menlo Park, which would offer a less expensive alternative when compared to new construction in Palo Alto.

The rapid expansion of the local technology industry in Palo Alto is creating challenging conditions for law firm tenants with upcoming lease expirations. Tech startups and law firms that have similar space requirements are competing against each other for the same space offerings since there are very few Class A blocks of space greater than 20,000 square feet remaining. Additionally, venture capital and private equity firms are slowly migrating away from Sand Hill Road in Menlo Park into Palo Alto to position themselves closer to prospects and clients.

A majority of the firms that have recently relocated to Palo Alto leased space that was formerly occupied by another firm. This game of “musical chairs” has been a prevalent trend over the past 24 months, as there has been very little turnover in space. The submarket has seen some new development, mostly in the Downtown Palo Alto area. However, 60.4 percent has already been preleased and several tenants are already negotiating on the remaining spaces. While many firms are looking to upgrade their space from traditional office to newer-generation workplaces, the lack of quality product and high rent premium for brand new space in leaves very few options in Palo Alto.

Morgan Lewis1400 Page Mill RoadRelocation60,000 s.f.

Haynes & Boone525 University AvenueRelocation13,091 s.f.

King & Spaulding601 S California AvenueRelocation25,799 s.f.



Orrick 80,000

Weil 70,000

Dentons 15,000




Net rent

$75.19Taxes



3.0%

20.0% 0% 10.0%





6Locational preference: Law firms are concentrated in the Stanford Research Park micromarket of Palo Alto, as the area has deep historical connections to Stanford University and nearby technology companies.

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14%

St. Louis


Outlook

Challenges for law firms• A lack of new constructions limits firms to existing product that may not suit

space requirements. • Due to high build-out costs, some landlords are less willing to fund tenant

improvement packages for firms.• Most of the large firms signed tenant-favorable long-term leases between

2008 and 2010. The market could be dramatically different when the leases begin expire over the next five to seven years.


• Elevated vacancy rates in the CBD will keep rents stable for at least the next 18 months.

• For firms smaller than 20,000 square feet, there are far more Class A options available.

• Move-up space is still plentiful in the CBD and several full floors remain available in Clayton.

Staying put—that’s been the theme of the notable St. Louis law firm transactions in the past year. Of the five largest, four were renewals and the only relocation was due to the existing building being converted to multi-family. Two of the transactions, both in Clayton, saw firms increase their footprints; Carmody McDonald doubled its space by taking a second floor at 120 South Central and Paule, Camazine & Blumenthal expanded by just over 10 percent at 165 North Meramec. This trend could continue as slow rental growth in the region may give landlords pause when it comes to funding the high build-out costs that come with relocating a law firm.

While St. Louis does have a large legal presence, these tenants only account for 2.3 percent of those active in the market. Activity in the industry will remain light for at least the next five years as most of the large firms signed long-term leases between 2008 and 2010. If some of the large firms were to enter the market today, options would be scarce; and any firm over 50,000 square feet would be limited to the CBD unless they were to anchor a new building in Clayton.

Carmody McDonald120 S Central AvenueRenewal with expansion32,000 s.f.

Schlichter Bogard & Denton100 S 4th StreetRenewal20,000 s.f.

Paule, Camazine & Blumenthal165 N Meramec AvenueRenewal with expansion21,000 s.f.



Herzog Crebs 22,000

Foley & Mansfield 20,000

Kortenhof McGlynn & Burns 10,000




Net rent

$11.53Taxes



2.0%

18.4% 11.5% 6.1%





9Locational preference: The majority of St. Louis firms are concentrated in two of the region's submarkets, Clayton and the CBD. As Clayton continues to tighten, growing firms could look to the CBD for additional space, something that historically has not happened.

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25%

Washington, DC–Downtown


Outlook

Challenges for law firms• Quality space options are dwindling; tenants continue to enter market years

in advance of their lease expirations to secure quality space.• Limited new deliveries over the next 36 months as development pipeline

remains suppressed and well-leased.• Rents may begin to rise among high-quality assets in 2015 as the top

segment of the market continues to tighten.


• A plethora of second-generation law firm space will come back to the market with multiple large law firm relocations and rightsizings.

• Substantial amount of high-quality space is likely to deliver in 2017 to 2019 with the flurry of potential ground breakings in 2015 and 2016.

• Concession packages remain at an all-time high.

Law firms comprise the largest segment of the tenant base in Washington, DC, occupying 45.0 percent of the core Class A market. Over the past five years, firms have focused on rightsizing and densifying, which has resulted in limited growth across the legal sector. Approximately 75.0 percent of law firms in the District have already rightsized, generally shedding 20.0 to 30.0 percent of their footprints in new transactions.

Although a restrained development pipeline has increased competition for new Trophy space, a plethora of second-generation law firm space will come back to the market given the relocations of several prominent firms, including Arnold & Porter at 555 12th Street, NW and Covington at 1201 and 1275 Pennsylvania Avenue, NW and the downsizing of firms such as Hogan Lovells at 555 13th Street, NW and Morgan Lewis at 1111 Pennsylvania Avenue, NW.

Despite widespread contraction activity, vacancy rates remain below 12.0 percent, making Washington, DC one of the tightest office markets in the country. The top segment of the market should continue to tighten over the next 36 months, given reduced construction activity and segmented growth in other areas of the local tenant base. Longer term, a flurry of potential new groundbreakings and repositionings could provide relief to large tenants seeking modern Trophy buildings.

Morgan Lewis1111 Pennsylvania Avenue, NWRenewal with contraction270,000 s.f.

White & Case701 13th Street, NWRenewal with contraction135,000 s.f.

Venable600 Massachusetts Avenue, NWRelocation245,000 s.f.



Finnegan 285,000


Steptoe & Johnson 200,000




Net rent

$35.78Taxes



2.5%

20.1% 4.5% 13.1%





92Locational preference: The majority of firms are located in the CBD, East End and Capitol Hill. Given few large existing quality blocks of space in the core, many AmLaw 100 firms are considering future developments with several of these options located in fringe locations of the CBD and East End, increasingly the northern part of the CBD or the emerging Mount Vernon Triangle segment of the East End.

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3%

Washington, DC–Northern Virginia


Outlook

Challenges for law firms• Rents at new Trophy properties remain a significant premium to the market

at $50 per square foot compared to average Class A asking rent of $37.00 per square foot in Tysons and $28.75 per square foot in Reston.

• While there are 145 blocks of 50,000 square feet available or vacant in Northern Virginia, there is only one block available in Reston Town Center for a sublease at 1818 Library Street.


• Tysons has more Class A availability than at any point since 2003, including 12 50,000-square-foot blocks.

• Concession packages are currently at all-time highs across Northern Virginia.

• Lock in rates before Phase II of the Silver Line opens in 2018, which will add three more metro stops along the Toll Road and connect Reston and Tysons with a larger employee base in Loudoun County.

Law firms make up only a small portion of tenants in Northern Virginia, occupying 3.9 percent of Class A space in Tysons, Merrifield and Reston. Law firms are located in those submarkets to serve the large concentration of government contractors and technology companies located outside the Beltway. While most firms are rightsizing and shedding between 20.0 and 35.0 percent of space, some have expanded recently. DLA Piper expanded by about 8,000 square feet at 11911 Freedom Drive in Reston Town Center, and Miles and Stockbridge expanded at 1751 Pinnacle Drive in Tysons.

While Reston Town Center has no blocks available for firms to relocate, the opening of the Silver Line to Tysons and Wiehle Avenue has led to a large pipeline of Trophy buildings under construction and planned. Phase II of the Silver Line will open in 2018 and include a stop at Reston Town Center as well as five additional stops, which provides an opportunity for firms to be in a transit-oriented development and also potential access to more clients and revenue opportunities with the growth expected.

DLA Piper11911 Freedom DriveRenewal with expansion31,674 s.f.

Ritzert & Leyton11350 Random Hills RoadRenewal10,658 s.f.

Miles & Stockbridge1751 Pinnacle DriveRenewal with expansion29,866 s.f.



Cooley 60,000

Nixon & Vanderhye 50,000

Stites & Harbison 20,000




Net rent

$25.01Taxes



2.7%

25.2% 12.1% 31.3%





7Locational preference: The majority of law firms are located in Tysons, with the remainder in Reston Town Center and Merrifield. While Reston Town Center has no blocks of space available, there is a large amount of Trophy space being built or planned in Tysons.

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11%

Westchester County


Outlook

Challenges for law firms• The number of desirable office locations has steadily decreased due to

many Westchester County office buildings becoming outdated.• Taxes are expected to continue rising in a market that already has the

some of the highest tax rates in the country.• Cost-of-living is relatively expensive for a small city, which scares away

some potential talent.


• White Plains is a hot city for Millennials; it may become easier to attract young talent in the coming years.

• Transportation accessibility is ideal, with two train stations located within the city.

• The downtown section of White Plains is about to be renovated, which in turn could attract more firms.

Westchester has been a prevalent landing spot for law firms throughout the last decade. There have been two law firm transactions in the past quarter, resulting in approximately 17,000 square feet being taken off the market. A trend that has continued to rise in popularity is private attorneys joining forces in order to rightsize their space and resources.

Many of the buildings in White Plains are quite old and lack some of the newer amenities that can be found in modern buildings. This has slowed leasing activity in the past year. This has not stopped the law firm Cuddy& Feder from exploring space in the White Plains CBD area for a 20,000-square-foot requirement. The tenant-favorable office market found in White Plains has not been taken advantage of so far by many law firms because of the lack of high-quality space close to transit.

Cerussi & Spring1 N BroadwayRelocation11,142 s.f.

Pino & Associates50 Main StreetRelocation6,000 s.f.



Cuddy & Feder 20,000




Net rent

$16.27Taxes



0.9%

9.8% 8.0% 16.0%





1Locational preference: The majority of law firms and practices are concentrated in the White Plains CBD/Railroad submarket, which has a substantial government presence and direct transit access.

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Appendix


2014 U.S. law firm leases > 50,000 s.f.

Law firm Address MarketSize (s.f.)

Transaction type

Real estate footprint

growing, stable or rightsizing?

White & Case 1221 Avenue of the Americas New York 440,000 Relocation Rightsizing

Hogan Lovells 555 13th Street NW Washington, DC 384,500 Renewal with contraction RightsizingMorgan Lewis 1111 Pennsylvania Avenue, NW Washington, DC 270,000 Renewal with contraction RightsizingDorsey & Whitney 50 S 6th Street Minneapolis 250,000 Renewal with contraction RightsizingVenable 600 Massachusetts Avenue NW Washington, DC 220,000 Relocation RightsizingSeyfarth Shaw Willis Tower Chicago 200,000 Relocation RightsizingLocke Lord 2200 Ross Avenue Dallas 176,057 Renewal StableDLA Piper 444 W Lake Street Chicago 175,000 Relocation RightsizingRobins, Kaplan, Miller & Ciresi 800 LaSalle Avenue Minneapolis 159,000 Renewal with contraction RightsizingHolland & Hart 555 17th Street Denver 145,693 Renewal StableMcGuire Woods 201 N Tryon Street Charlotte 144,293 Renewal with contraction RightsizingWhite & Case 701 13th Street, NW Washington, DC 135,000 Renewal with contraction RightsizingStoel Rives 750 SW 9th Avenue Portland 131,906 Relocation RightsizingBriggs & Morgan 80 S 8th Street Minneapolis 116,827 Renewal with contraction RightsizingBakerHostetler 127 Public Square Cleveland 115,000 Relocation RightsizingGardere 2021 McKinney Avenue Dallas 109,000 Relocation RightsizingJackson Walker 2323 Ross Avenue Dallas 104,064 Relocation RightsizingDuane Morris 1540 Broadway New York 89,074 Renewal Stable

Polsinelli 1401 Lawrence Street Denver 88,000 Relocation Growing

Troutman Sanders 875 Third Avenue New York 87,126 Relocation RightsizingMiller & Chevalier 900 16th Street NW Washington, DC 85,600 Relocation RightsizingFoley & Lardner 90 Park Avenue New York 82,647 Renewal Stable

Gardere Wynne 1000 Louisiana Street Houston 75,000 Renewal with expansion Growing

Sidley Austin 2021 McKinney Dallas 75,000 Relocation GrowingRawle & Henderson Widener Building Philadelphia 69,420 Renewal Stable

Shutts & Bowen 200 S Biscayne Boulevard Miami 69,155 Relocation Stable

Akin Gump 1111 Louisiana Street Houston 69,000 Renewal StableSchnader Harrison 1600 Market Street Philadelphia 67,000 Renewal RightsizingNixon Peabody 799 9th Street NW Washington, DC 65,565 Relocation Rightsizing

Greenspoon Marder 200 East Broward Boulevard Fort Lauderdale 64,500 Renewal with expansion Growing

Taft Stettinius & Hollister 111 E Wacker Drive Chicago 63,000 Renewal Stable

Keller & Heckman 1001 G Street NW Washington, DC 62,594 Renewal with contraction RightsizingRichards Kibbe & Orbe 200 Liberty Street New York 60,000 Renewal StableMorgan Lewis 1400 Page Mill Road Silicon Valley 60,000 Relocation Rightsizing

Pond Lehocky One Commerce Square Philadelphia 60,000 Relocation Growing

Perkins Coie 1120 NW Couch Street Portland 59,809 Renewal StableMorrison Foerster 12531 High Bluff San Diego 59,328 Renewal with contraction Rightsizing

White & Case 200 S Biscayne Boulevard Miami 58,400 Renewal with contraction Rightsizing

Sheppard Mullin 12275 El Camino Real San Diego 54,933 Renewal StableKitch 1 Woodward Avenue Detroit 53,000 Renewal StableWinston & Strawn 101 California Street San Francisco 52,235 Renewal with expansion GrowingMcGuireWoods 2000 McKinney Avenue Dallas 51,006 New Growing


U.S. law firm presence


Number of law firms occupying greater than 50,000 s.f.

Percent of Class A core (sub)market occupied by law firms

Number of AmLaw 100 firms with offices locally

0 20 40 60 80 100 120 140

ColumbusFairfield County

OaklandSacramento

Westchester CountyFort Lauderdale

Long IslandAustin

Raleigh-DurhamRichmond

PortlandSilicon Valley

CharlotteNorthern Virginia

SeattleBaltimoreCincinnati

IndianapolisMiami

Orange CountySt. Louis

DenverPhoenix

PittsburghSan DiegoCleveland

DetroitMinneapolisPhiladelphia

San FranciscoAtlanta

HoustonBostonDallas

Los AngelesChicago

Washington, DCNew York

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

Northern VirginiaFairfield County

San FranciscoOakland

Long IslandOrange County

Raleigh-DurhamCharlotte

Westchester CountyPhoenix

BaltimoreDetroitSeattle

PittsburghPortland

San DiegoNew YorkCincinnati

SacramentoDenverAtlanta

ChicagoDallas

HoustonMinneapolis

BostonIndianapolisLos Angeles

St. LouisPhiladelphia

MiamiRichmondColumbusCleveland

AustinFort Lauderdale

Silicon ValleyWashington, DC

0 20 40 60 80 100 120

Long IslandOakland

Raleigh-DurhamWestchester County

CincinnatiDetroit

Fairfield CountyBaltimore

IndianapolisFort Lauderdale

St. LouisClevelandColumbusRichmond

MinneapolisPortland

PittsburghPhoenix

SacramentoSeattle

CharlotteDallas

PhiladelphiaAustin

Northern VirginiaOrange County

San DiegoAtlantaDenver

MiamiBoston

Silicon ValleyChicagoHouston

San FranciscoLos Angeles

New YorkWashington, DC

Class A asking rents, tenant improvement allowances and free rent


Average Class A asking rent ($ p.s.f. full service)

Average Class A tenant improvement allowance (new deal))

Class A free in months (new deal)

$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00

St. LouisDetroit

CincinnatiIndianapolis

ClevelandAtlanta

BaltimorePhoenix

ColumbusCharlotte

RichmondRaleigh-DurhamOrange County

PittsburghPhiladelphia

Westchester CountyPortland

MinneapolisDallas

SacramentoLong Island

DenverSan Diego

SeattleFort Lauderdale

Northern VirginiaChicagoOakland

Los AngelesMiami

HoustonAustin

Fairfield CountyBoston

Washington, DCSan Francisco

New YorkSilicon Valley

$0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00

AustinSan Diego

OaklandLong Island

Fort LauderdalePittsburgh

Raleigh-DurhamRichmond

Silicon ValleyWestchester County

Fairfield CountyIndianapolis

CincinnatiColumbus

DetroitPhoenix

St. LouisAtlantaDallas

Orange CountyMinneapolis

ClevelandMiami

PhiladelphiaSan Francisco

New YorkBaltimore

BostonHoustonPortland

SacramentoCharlotte

Northern VirginiaChicagoSeattleDenver

Los AngelesWashington, DC

0 2 4 6 8 10 12 14

AustinOakland

BostonHouston

PittsburghSan Francisco

MiamiSilicon Valley

Westchester CountyLong Island

CincinnatiFairfield County

RichmondSan Diego

CharlotteFort Lauderdale

MinneapolisPortland

Raleigh-DurhamColumbus

PhiladelphiaChicago

AtlantaCleveland

DallasDenverDetroit

IndianapolisLos Angeles

Northern VirginiaOrange County

PhoenixSacramento

SeattleSt. Louis

BaltimoreNew York

Washington, DC

Market 2014 2015 2016 2017 2018

Atlanta Neutral Landlord Landlord Landlord LandlordAustin Landlord Landlord Landlord Landlord LandlordBaltimore Tenant Tenant Neutral Neutral LandlordBoston Landlord Landlord Landlord Neutral NeutralCharlotte Landlord Landlord Landlord Neutral NeutralChicago Neutral Landlord Neutral Tenant TenantCincinnati Neutral Neutral Neutral Landlord LandlordCleveland Neutral Neutral Landlord Landlord LandlordColumbus Neutral Neutral Neutral Landlord LandlordDallas Neutral Landlord Landlord Neutral NeutralDenver Landlord Landlord Landlord Neutral NeutralDetroit Tenant Neutral Neutral Landlord LandlordFairfield County Tenant Tenant Neutral Neutral LandlordFort Lauderdale Neutral Landlord Landlord Landlord LandlordHouston Landlord Landlord Landlord Landlord NeutralIndianapolis Tenant Tenant Neutral Landlord LandlordLong Island Neutral Landlord Landlord Landlord LandlordLos Angeles Neutral Neutral Landlord Landlord LandlordMiami Neutral Neutral Landlord Landlord LandlordMinneapolis Neutral Landlord Neutral Tenant NeutralNew York Neutral Landlord Landlord Neutral NeutralNorthern Virginia Tenant Tenant Tenant Neutral NeutralOakland Tenant Neutral Landlord Landlord NeutralOrange County Landlord Landlord Landlord Landlord LandlordPhiladelphia Landlord Landlord Landlord Neutral NeutralPhoenix Neutral Neutral Landlord Landlord LandlordPittsburgh Landlord Landlord Landlord Landlord LandlordPortland Neutral Landlord Tenant Tenant NeutralRaleigh-Durham Landlord Landlord Landlord Neutral NeutralRichmond Tenant Tenant Neutral Neutral NeutralSacramento Tenant Neutral Landlord Landlord LandlordSan Diego Neutral Landlord Landlord Landlord LandlordSan Francisco Landlord Landlord Landlord Neutral NeutralSeattle Neutral Landlord Landlord Neutral NeutralSilicon Valley Landlord Landlord Neutral Neutral NeutralSt. Louis Neutral Neutral Landlord Landlord NeutralWashington, DC Tenant Tenant Neutral Landlord LandlordWestchester County Tenant Tenant Neutral Neutral Landlord


U.S. market outlook matrix

54

For more information, please contact:

Americas BrokerageTom Doughty, International [email protected]+1 202 719 5652

Elizabeth Cooper, International [email protected]+1 202 719 6195

ResearchJohn Sikaitis, Regional [email protected]+1 202 719 5839

Lauren Picariello, National [email protected]+1 617 531 4208

Phil Ryan, Research [email protected]+1 202 719 6295

Contacts


55

Law firms still have more opportunity in front of them for maximizing real estate efficiencies and thus creating cost savings, including those firms that have already have rightsized. U.S. firms could take a page from their global counterparts and close the gap on modern workplace layouts, even if these measures are more conservative. Over the long term, this will lead to continued second-generation spaces coming back to the market for lease opportunities.


About JLLJLL (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $4.0 billion, JLL operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 3.0 billion square feet. Its investment management business, LaSalle Investment Management, has $47.6 billion of real estate assets under management. For further information, visit www.jll.com.

About JLL ResearchJLL’s research team delivers intelligence, analysis and insight through market-leading reports and services that illuminate today’s commercial real estate dynamics and identify tomorrow’s challenges and opportunities. Our more than 400 global research professionals track and analyze economic and property trends and forecast future conditions in over 60 countries, producing unrivalled local and global perspectives. Our research and expertise, fueled by real-time information and innovative thinking around the world, creates a competitive advantage for our clients and drives successful strategies and optimal real estate decisions.

This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without prior written consent of Jones Lang LaSalle IP, Inc.

COPYRIGHT © JONES LANG LASALLE IP, INC. 2014

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