- Law firms are leading a “flight to quality” in the office sector, driving demand for premium space even as overall market vacancies remain high.
- Top-tier office buildings have posted 152.8M SF of positive absorption since Q2 2022, while total office occupancy has declined by 300M SF.
- Vacancy in newly built offices is now in the single digits, with modern buildings commanding record-high rents—some doubling their original asking rates.
- Leasing activity by law firms has surged 34.7% since 2020, with projected growth of another 10% over the next three years.
A Modernization Movement
In a market still recovering from pandemic-era shifts, law firms are distinguishing themselves as major players in the push toward premium real estate, reports GlobeSt. According to JLL’s Law Firm Group, the sector has shown a strong preference for newer, amenity-rich properties—on average, 27 years younger than previous office spaces—as part of a broader effort to attract talent and clients.
Supply Tightens As Demand Surges
Despite sluggish overall construction and the removal of 126M SF of office space since 2020 due to demolition or conversion, law firms have shown increased leasing activity. In 2024 alone, they leased 19.4M SF, up from 14.4M in 2020 and 8% above pre-pandemic averages.
As options for new relocations diminish, renewals are climbing—up 10.1% since 2022. And when removing underperforming or financially distressed buildings from vacancy stats, the rate drops sharply to 9.2%, signaling high competition for best-in-class assets.
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Premium Properties, Premium Pricing
The surge in demand for elite office buildings has given landlords significant pricing power. Newer assets (delivered 2018–2024) have seen rent increases of more than 40%, with some deals far exceeding that benchmark. Notably, a recent lease at Miami’s 830 Brickell Plaza closed at $190 PSF—over double its initial asking price.
Law Firms Leading By Example
Top legal tenants are putting their money where their brand is. McDermott Will & Emery recently signed a 15-year, 150K SF lease for the top five floors of a new BXP development in Washington, DC. The firm will occupy part of a 320K SF project replacing a 12-story structure with a state-of-the-art office tower.
Why It Matters
Law firms’ flight to quality signals more than just a real estate preference—it’s a strategic move in an era of hybrid work, talent wars, and evolving client expectations. As landlords double down on high-end developments, the legal industry is proving to be a bellwether for how professional services adapt to a post-pandemic office landscape.
What’s Next
With new construction at decade lows and financial distress freezing transactions, competition for premium office space will only intensify. As law firm leasing volumes continue to rise, expect even more aggressive bidding for next-generation buildings—and further price escalations in top-tier markets.
