Savills Studley represented two law firms in significant leasing transactions in downtown Los Angeles for a total of approximately 95,000 square feet of office space.
Wilson Elser signed a long-term lease renewal for 41,441 square feet at City National Plaza, 555 South Flower Street. The firm, which occupies the entire 29th floor and half of the 28th, has been located here since 2005.
Gordon & Rees executed a lease restructure and long-term expansion at U.S. Bank Tower, 633 W. 5th Street. The firm will occupy just over 50,000 square feet encompassing the full 52nd and 53rd floors and half of the 51st. The transaction included converting what had been an existing sublease of approximately 10,000 square feet to a direct lease, and restructuring the firm’s entire commitment to be co-terminus.
Andrew Lustgarten, corporate managing director, and Mark Sullivan, executive vice president, with global tenant advisory firm Savills Studley represented the law firms in the transactions.
“In both cases, our clients were active in the marketplace significantly in advance of their lease expirations, exploring a variety of alternatives including relocation opportunities,” said Lustgarten. “At present, the downtown market is somewhat of a conundrum. With the Class A availability rate hovering around 20 percent, the submarket represents an excellent value and landlords are willing to stretch to attract and retain tenants. At the same time, downtown is experiencing a boom in the residential and retail sectors as well as increased office activity from outside the market that could potentially translate to an increase in office rents,” he added.
The recent leasing activity at U.S. Bank Tower is a case in point and reflects just how quickly things can tip. The law firm of Lewis Brisbois Bisgaard & Smith converted a temporary commitment in the tower to a long-term lease for more than 215,000 square feet, boosting the building’s occupancy rate from 60 to 75 percent in a single transaction. “Gordon & Rees was keenly aware of this activity and by restructuring early, we were able to preserve our client’s occupancy in the building, take advantage of the market’s current favorable rates and protect the firm against future market risk,” noted Sullivan.
The landlord brokers in the transactions were John Bendetti, an in-house advisor with CommonWealth Partners, owners of City National Plaza, and John Eichler of Cushman & Wakefield on behalf of OUE Limited and U.S. Bank Tower.