Law Firm Inks $1.8-Mil Sublet Deal

LOS ANGELES-A law firm based on the East Coast has signed an office sublease valued at $1.8 million in Downtown, the latest in a string of sublease transactions triggered in part by the region’s slowing economy.

The law firm is Philadelphia-based Drinker, Biddle & Reath. Terms of the six-year deal will provide it with 13,675 sf of class A space at Maguire Partners’ Wells Fargo Center, 333 S. Grand Ave.

The firm’s new space is on the 17th floor of the center’s north tower. It was subleased from Germany’s Dresdner Bank AG.

William H. Atha II and Timothy C. Macker Jr. of Grubb & Ellis’ Downtown LA office represented the sublessor in the transaction. Lisa St. John of Trammell Crow Co. represented the sublessee.

A growing number of tenants are choosing to sublet space from existing tenants instead of dealing directly with landlords, according to a recent report by the LA office of Julien J. Studley Inc. Sublease rates are often lower than rates for space rented directly from a building owner, an important consideration when the economy is soft and nearly every type of business is looking for ways to cut overhead expenses.

Though the space rented by Drinker, Biddle is relatively small, Studley notes that some much larger sublease transactions have recently been completed. For example, the LA Unified School District a few months ago sublet 704,000 sf of Downtown office space at 333 S. Beaudry Ave. from Bank of America.

Still, the amount of space available for sublet countywide is much higher than in the past. Sublet space here accounts for about 20% of all available space, Studley says, roughly twice the traditional average.