Proskauer Rose Lease Decision Halts Building Construction
A decision by Proskauer Rose to back out of a tentative agreement to occupy about half the space in a new building on the west side of Midtown Manhattan has halted construction of the skyscraper.
Boston Properties stopped construction of the building in February, Reuters reports. It’s not the only commercial landlord, however, that is feeling the effects of law firms’ battles to remain profitable in the recession.
Law firms are especially important to commercial landlords in Manhattan, where the legal sector resides in about 10 percent of occupied office space, according to the story. By the middle of the year, leasing by law firms in Manhattan was down 16.5 percent, according to CB Richard Ellis.
The decline was worse in Los Angeles, where law firm leasing was down 42.7 percent, and in San Francisco, where it was down 56.6 percent, according to CB Richard Ellis figures cited in the story.
The real estate market has taken a hit as a result of law firm layoffs and closings, including the shuttering of Heller Ehrman; Thacher Proffitt & Wood; Thelen Reid Brown Raysman & Steiner; and WolfBlock.
In San Francisco, a developer has defaulted on a loan for a building at 333 Bush because of the demise of Heller Ehrman, the major tenant. Developer Hines and Sterling American Properties is returning the building to its lenders.
