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Law firms are supplanting investment banks as the leaders in Manhattan office leasing.
Financial firms usually dominate the city's commercial rental market. But this year, Wall Street is retrenching, and law firms are growing. They're merging with other firms, and also adding to the practice groups that stay busy in a sluggish economy.
"This is one of the few industries that thrives in all economic climes," says Mitchell S. Steir, a vice chairman at real estate brokerage Julien J. Studley Inc.
In the first five months of this year, attorneys rented a total of 550,029 square feet in Manhattan, according to data from Studley. They accounted for many of the major deals signed in the midtown market, and they're expected to keep up their leasing pace in the coming months.
A dozen firms are looking for 100,000 square feet or more apiece. Together with several seekers of smaller spaces, they need at least 2.4 million square feet. Moreover, prominent Manhattan firm Simpson Thacher & Bartlett is closing in on a lease renewal for 425,000 square feet at 425 Lexington Ave., and might take at least 100,000 square feet for expansion.
Diluting concentration
Law firms' predominance this year is a sign of the depths to which Wall Street has fallen. Financial firms rented only 481,565 square feet this year, down from 4.3 million square feet for the same period last year.
Some activity continues, of course. Bear Stearns and CIBC World Markets are looking...