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After nearly 15 years in downtown San Francisco’s old Federal Reserve Bank building, Orrick, Herrington & Sutcliffe is looking for new digs. According to Chairman Ralph Baxter Jr., Orrick is considering various real estate options as its current lease enters its final year, including relocating to a new South of Market office complex. Last week, the San Francisco Business Times reported that Orrick had signed a letter of intent to occupy the top five floors of a Foundry Square building, according to unnamed sources. Baxter would not comment on whether Orrick has signed such a letter of intent, but did confirm that the Foundry Square property was “certainly one of the places that we’ve been considering.” Jim Sullivan, the president of Wilson Equity, which owns the Foundry Square property, said his firm did not have a lease with Orrick and could not comment on any discussions that might have occurred. Located at First and Howard streets, Foundry Square is a four-building development that’s still partially under construction. Its modern glass facades and rippled roofs are the opposite of the stately columns and stairs that distinguish the old Federal Reserve building, where Orrick houses its more than 170 San Francisco attorneys. Built in 1924, the Federal Reserve building at Sansome and Sacramento streets has been in many ways a natural fit for Orrick, which prides itself on its 136-year-old San Francisco roots and its finance and public bond practice. But despite the cachet of being based in the historical landmark, some San Francisco attorneys said they were not surprised that Orrick would check into other options as the time came to renew its lease. “That’s to be expected. If they don’t look at other alternatives, then how can they negotiate with their landlords?,” said Stuart Lipton, the managing partner of Howard, Rice, Nemerovski, Canady, Falk & Rabkin. Baxter said the decision of whether to stay in the old Federal Reserve building or move will be made “well in advance” of its current lease’s expiration, in 2004. “We think that the old Federal Reserve building has been a great place for us for the last 15 years and has very positive attributes, including the stature of the building and the tone that it connotes,” said Orrick’s Baxter. “But other buildings have other attributes that are appealing as well. Many have newer and better technology infrastructure for example.” The most obvious advantage in moving might be to find more favorable rental rates. Since the economy began its downturn two years ago, commercial rents in San Francisco have dropped precipitously. According to broker BT Commercial Real Estate, rental rates are half of what they were at their peak in 2000. Baxter would not comment on what Orrick pays per square foot in the Federal Reserve building, but many real estate experts said the Foundry Square property, which has struggled to find tenants, could make an attractive offer in terms of rates and subsidized tenant improvements. Growth is also motivating Orrick. With the exception of a small travel agency in the lobby of the old Federal Reserve building, Orrick occupies all 150,000 square feet of the space. While Baxter said the firm still has some room to expand within the building, it’s clear that Orrick needs a bigger space in the long term if it intends to grow and keep all its attorneys under one roof. Modern office space like Foundry Square can also be more cost-efficient. “In a modern high-rise building, the floors are set up in a more efficient way than old buildings so that you can fit more people equally comfortably in a smaller square footage,” said Glenn Snyder, the managing partner of Pillsbury Winthrop’s San Francisco office.

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