The law firm wants to make its offices more modern and efficient, says Tim O'Brien, president of locally based Resource Commercial Real Estate LLC. He and Sam Smith represented the tenant, while Dan Richardson with CB Richard Ellis, which manages the building, represented the landlord. "They're using this opportunity to re-plan their space," says O'Brien. "They're going after the trend of standardized, one-size offices, as opposed to having different-sized offices for partners. Also, they're going with a centralized conference floor, instead of having conference rooms on each floor, allowing for easier scheduling." The tenant has hired Gensler to redesign the space, and move-in is expected by December.
O'Brien says the building has had some troubles. "I'm not sure of the occupancy now, I know they've done some leasing, but late last year the vacancy was at about 20%," he says. He declined to quote the lease rate. The average rate for the downtown runs at about $20 per sf. "The office market here doesn't have the extraordinary growth, but we don't have the extraordinary valleys, either," O'Brien says. "We're not by any stretch depressed, we're steady. Companies that are growing organically are the bulk of the absorptions." The 14.6-million-sf CBD had an 11.7% vacancy rate in the first quarter, but had almost 100,000 sf of negative absorption, according to a Grubb & Ellis report.
O'Brien tells Globest.com that there will be a lot of musical chairs continuing this year for downtown office space. "There's more deals like this coming. Safeco Insurance, for example, was looking to possibly move to the suburbs when its 125,000-sf lease runs out at 500 N. Meridian next year. However, since they were acquired by Liberty Mutual earlier this year, that might be postponed for awhile," he says.
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