With New Law Firm Leases, D.C.'s Office Buildings Are Getting Top-Heavy
The trophy office building planned at the corner of 21st and L streets NW will not deliver for at least two years, but a major tenant is already in talks to lease its top four floors.
The lease continues a trend of law firms flocking to the top of trophy office buildings, leaving the lower floors vacant. Of seven office buildings currently or soon-to-be under construction in D.C.'s core submarket, 1.5M SF has been leased in the top stack of the building, with 1.1M SF still available on the lower floors, according to CBRE.
Goodwin Procter is moving to the top three floors of JBG Smith's 1900 N development, as the developer looks to lease the bottom six floors. That project, also in the Golden Triangle BID, broke ground in April once the lease was signed and is also slated for a late 2019 delivery.
“Most of these are law firms, and it's a matter of status and branding that they have a tendency to go to the highest-quality building in the best space,” CBRE research manager Wei Xie said. “Some of them have been in their previous space for years, so this is a chance to upgrade to the latest and greatest space with the best view and branding opportunities.”
Tenants looking to lease the lower floors of these buildings can see up to a 10% discount from the top-floor rent, according to CBRE. But law firms typically don't want to share a building with another law firm, Xie said, so the lower floors of new buildings tend to attract nonprofits, creative companies or co-working tenants.