Law Firm Inks Record Lease

LOS ANGELES, CA-The law firm of Quinn Emanuel Urquhart Oliver & Hedges signed a 10-year, $15 million lease for 121,000 sf of space at the TCW Building at 865 S. Figueroa St. in downtown L.A. that Insignia/ESG brokers say is the largest law firm lease in Los Angeles County this year.

Quinn Emanuel is a 180-lawyer business litigation firm that has expanded its space nearly fourfold since moving into the TCW Building in 1994, according to Steve Bay of Insignia. Bay represented the law firm along with partner Clay Hammerstein of Insignia, while building owner Manufacturers Life Insurance was represented internally by Parker Jones.

The new deal expands the legal firm’s space from its former 80,000 sf.

“We did the original lease when Quinn Emanuel moved into 30,000 square feet in 1994, and now they’re at 121,000,” Bay tells GlobeSt.com. “Just this year they picked up two floors of sublease space in the building.”

The two floors of former sublease space are now part of the new lease, Bay says. He says Quinn Emanuel’s original lease ran until 2009, but the firm had an option to terminate in a little under two years from now. It chose to negotiate an early renewal to lock in a favorable rent rate, a strategy that Bay says many downtown firms are pursuing and some landlords are welcoming.

“In some cases, landlords will negotiate three or four years before the lease is due to expire” to lock in tenants for longer terms, Bay says. He explains that one of their concerns is the huge amount of space in leases due to expire between 2005 and 2008.

“In 2006 alone, there is about 2.5 million square feet of premium space downtown that is due to expire,” Bay says. Not all landlords are willing to negotiate the early renewals, he notes, but many are.

Quinn Emanuel will occupy five full floors and portions of three additional floors at the 35-story TCW Building. The deal was the latest in a series of large law firm leases this year in Southern California as legal firms continue to grow, making them one of the few types of office tenants who are expanding. Among the largest of the others were a 100,498-sf extension by Howrey Simon Arnold & White at 550 S. Hope St. and a 117,000-sf renewal and expansion by Lewis D’Amato, Brisbois & Bisgaard at 221 N. Figueroa St., both downtown and both brokered by Hammerstein and Bay; plus an 85,175-sf sublease for Alschuler Grossman Stein & Kahan at The Water Garden in Santa Monica that they brokered with Insignia’s Hunt Barnett. In the Lewis D’Amato deal, Derek Graham of Insignia represented the landlord, along with Hammerstein and Bay, while Craig McKenna of Julien J. Studley Inc. represented Lewis D’Amato.