Law Firm Leasing Merry-Go-Round Continues

Meanwhile, international law firm Jones Day already is weighing its options, even though it has a 138,000-sf lease with Prime Group Realty Trust at 77 W. Wacker Dr.

"Current market conditions have resulted in some exceptional leasing opportunities for tenants of Jones Day's stature," says Jones Lang LaSalle managing director Melissa Copley. "We are actively exploring all alternatives available to the firm."

That was the case for Kirkland & Ellis, which was represented by Julien J. Studley Inc. EVP Joe Learner.

"Last year, law firms were the major driver in the office market, accounting for more than 29% of total leasing volume in Downtown Chicago," Learner says in a statement. "This trend has continued into 2003 as the legal services industry experiences changes in business practices and undergoes additional mergers and acquisitions."

The Kirkland & Ellis deal is somewhat ominous for the local economy, as the law firm needs more space to accommodate its growing bankruptcy practice at the third tallest building in the U.S., which was acquired by Wells Real Estate Funds of Atlanta for $465 million.

Jones Lang LaSalle's most recent market report notes Downtown office vacancy, including available sublease space, has risen to 15.8% this year, more than a half-point since the beginning of 2003. While Downtown vacancy is projected to slide back down to 13.4% by 2005, that would still be slightly higher than the 2001 level.

Meanwhile, rents have slid 2.3% so far this year, nearly matching the decline posted Downtown in 2002, according to Jones Lang LaSalle's first-quarter report. The decline is more than twice as steep Downtown than it is in the suburbs, where Jones Lang LaSalle pegs vacancy with sublease space at more than 26%.

Copley has assembled a team that includes SVP Steve Steinmeyer and VP Julie Ryan to represent Jones Day.