With rates for commercial real estate in law’s twin bastions, Manhattan and Washington, D.C., at all-time highs, there’s a temptation to start looking at cheaper offsite digs for support staff or for disaster preparedness. A temptation, “but no trend-yet,” says Ken Rapp, executive vice president of CB Richard Ellis in the firm’s midtown Manhattan office, adding that “market pressures” may change that.
Rates in Manhattan, where the asking price is well over $100 per square foot for new prestige buildings, climbed 30 percent in 2007 and, though slowing, commercial realtor Cushman & Wakefield predicts a 5-10 percent increase in 2008. Top-of-the-line Class A buildings in Washington, D.C., will demand $70-$80 per square foot by 2009, up 12 percent over the past year; an increase of 78 percent in a decade, says Wendy Feldman Block, managing director of commercial real estate firm Studley Inc.’s Washington, D.C., office.
