Kramer Levin, which had considered relocating its offices to the Far West, decided to stay put and consolidate its footprint on Sixth Avenue.
The law firm signed a 15-year lease for 265,000 square feet at Silverstein Properties 1177 Sixth Avenue, the Wall Street Journal reported. That’s about 50,000 square feet less than it now occupies.
Law firms can operate out of less space than they used to require, in part because law libraries are now housed online, and lawyers need fewer assistants than they once did.
“Businesses can be very healthy and vibrant and they’re still taking 10 percent less space to accommodate the same number of employees,” said Newmark Grubb Knight Frank’s Moshe Sukenik, who represented Kramer Levin in negotiations.
Kramer Levin had considered moving west to buildings at the Related Companies and Oxford Properties Group’s Hudson Yards and Brookfield Property Partners’ Manhattan West. Such a move would add to fears that tenants are abandoning Sixth Avenue, but a number of tenants have recently decided not to leave Midtown.
UBS Group AG, 21st Century Fox and Fox News have renewed their leases, and Major League Baseball signed a lease at 1271 Sixth Avenue.
Sixth Avenue and Rockefeller Center had an availability rate of 12.4 percent in January, down from 13.5 percent in the fourth quarter of 2016, according to Newmark data.
Silverstein and the California State Teachers’ Retirement System bought the 1 million-square-foot tower at 1177 Sixth Avenue in 2007 for about $1 billion. UBS Global Asset Management bought a stake in the property in 2014.
A spokesperson for Silverstein said the building is 95 percent occupied with tenants such as Bank Hapoalim and the Practicing Law Institute. [WSJ] – Rich Bockmann