Law Firm Leasing Sets First-Quarter Record In 2023
In the first quarter of 2023, law firms leased 3.6M SF nationwide, the most for any first quarter on record, according to a new report by Cushman & Wakefield. About 2.2M SF of that total was in the top 10 U.S. markets.
The first-quarter uptick comes after a particularly strong 2022 for law firm leasing that saw about 14.6M SF taken nationwide, which was a record itself, and a little ahead of the 2019 national total of 14.2M SF, the report noted. Both 2020 and 2021 represented slumps in law firm leasing, with 10.8M SF and 10.9M SF taken, respectively.
Though overall leasing was up last year, legal tenants who renewed or changed locations within the same market took an average of 13% less space than previously, according to Cushman & Wakefield.
In 2022, only 51% of the space taken by law firms was in the nation's top 10 markets, which by Cushman & Wakefield defines as Atlanta, Boston, Chicago, Dallas-Fort Worth, Houston, Los Angeles, New York, Philadelphia, San Francisco and Washington, D.C.
New leases were dominant in New York in 2022, representing 90% of the total, while Chicago and Boston saw 71% and 69%, respectively. Markets such as Philadelphia, Atlanta and Houston still favored renewals.
Sunbelt markets notched upticks in law leasing totals in 2022. Houston, for instance, saw its share of leasing rise from 4% of the total law leasing nationwide in 2021 to 9% in 2022. Dallas-Fort Worth experienced a gain from 2% to 5% over the same period.
The largest law lease in the last 12 months was in Chicago, when the firm Katten Muchin Rosenman renewed for 247K SF in Q1 2023. Outside the top 10 markets, the largest deal for that period was in Nashville — and it was the third-largest overall — where Bass, Berry & Sims took 195K SF in a new lease in Q2 2022.
