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D.C. law firms have been migrating in droves from one Northwest downtown neighborhood to another, much like the pioneers of 150 years ago moved west. This movement, though, is in the opposite direction: In recent years, nearly half of the top 50 law firms in the District have built offices and fortunes in downtown’s East End. Traditionally, the K Street Corridor was the seat of power for lawyers and lobbyists in Washington. In its heyday, in the late 1970s and 1980s, the seven blocks between 15th Street and 22nd Street were home to many of the most prominent firms in the city. However, the buildings there began to age and were not large enough to offer expansion opportunities for the growing legal industry. A new home was needed. The East End, with large blocks ready for development in the early 1990s, became the destination of choice. Covington & Burling was the very first pioneer in this migration, in 1980, leaving 888 16th St. to set up shop at 1201 Pennsylvania Ave. Sutherland, Asbill & Brennan; Crowell & Moring; and Hogan & Hartson were the next firms to pack up their wagons and move to this new territory. Though slow at first, the eastward migration has speeded up in the past five years, making the East End the hottest neighborhood in the hottest real estate market in the country. With more than $2.3 billion in investment and 3.8 million square feet of new office development delivering by the end of 2004, the blocks from 15th to Fourth streets have become a virtual Mecca for law firms in Washington. Not too long ago, the East End was considered a cutting-edge location. No longer. A critical mass of law firms is already established there. The following major firms are just a few of those that have relocated to this area in the past several years: • Finnegan, Henderson, Farabow, Garrett & Dunner is lined up to move farther east, from 1301 I St. to 901 New York Ave. Shea & Gardner will join them there from 1800 Massachusetts Ave. (2004). • McDermott, Will & Emery moved from 1850 K St. to 600 13th St. (1997). • Arnold & Porter consolidated two offices on New Hampshire Avenue and 21st Street in its move to 555 12th St. (1995). • Venable has just moved to Terrell Place at 575 Seventh St. from 1201 New York Ave. (2003). • Nixon Peabody moved from 1 Thomas Circle to 401 Ninth St. (2000). • Paul Hastings, Baker Botts, and Howrey Simon all moved east to 1299 Pennsylvania Ave. (1994). Paul Hastings is moving again, to 875 15th St., in 2005. • Morgan, Lewis & Bockius moved from 1800 M St. to 1111 Pennsylvania Ave. (2002). DEVELOPMENT BOOM As construction cranes fill the skyline in the East End, developers are preparing the way for more relocation. The buildings known as 900 Seventh St., the Atlantic Building (950 F St.), and Carroll Square (975 F St.) will offer the prestige of a brand-new project, a larger floor plate, greater efficiencies, and more amenities. For example, 900 Seventh Street offers 350,000 square feet and a typical floor plate of 28,500 square feet, nearly double the size of most buildings in the CBD. Larger floor plates create room for more people on each floor, eliminating the need for redundant services (like copiers, kitchens, and lobbies) and improving productivity as well as cost-efficiency. Modern development techniques make the space used for hallways, elevators, and lavatories more efficient. Developers are also incorporating energy-efficient building systems, lower-level conference spaces, state-of-the-art building security, and first-class amenities such as health clubs. Desirable office space is not the East End’s only draw for law firms. Its appeal can also be attributed to all the new and emerging residential, retail, and entertainment attractions. The area around Seventh Street from Pennsylvania Avenue to the new Washington Convention Center has become an 18-hour live-work-play environment. With three Metro stops, 3,500 new residential units, two new world-class theaters, and more than 2.3 million square feet of retail space on the way, the East End creates a compelling urban environment previously unseen in Washington. This vibrant combination could help firms attract new associates who want an active city lifestyle. The trick for a large firm is finding a large enough block of space — with expansion options — that is available at the right time. Vacancy is hovering around 6.2 percent for existing buildings, and nearly 50 percent of the new construction projects are already pre-leased. Because of these market dynamics, law firms are starting to go to market years before their leases expire. Smaller firms have an abundance of prime and sublease opportunities to choose from throughout the city. The real competition is for 75,000 square feet and more of “class A” and “trophy class” space, which is what most law firms require. LONG-RANGE PLANNING At last count, at least 15 law firms in the Central Business District have leases expiring in the next three years, and many are already looking for new space in the East End. Combined, these firms may need approximately 2.5 million square feet of space. Foley and Lardner, for example, whose lease doesn’t expire until 2008, is already looking for a new location for their 250,000-square-foot D.C. office, currently in Georgetown. To fill new buildings, landlords aggressively market new projects to the largest users, to minimize the creation of smaller, less desirable spaces. One technique some developers are using to entice large law firm clients is to offer significantly higher than market tenant-improvement packages for custom build-out by the firm. For law firms, controlling real estate costs is a common objective. Yet moving to a new building doesn’t necessarily increase the total cost of occupancy. In newer buildings, which the East End offers, modern design and engineering techniques make it possible for firms to accommodate more people in the same amount of space. With more efficient design and advances in technology, which diminish the need for large libraries and other support facilities, firms can reduce average space per attorney from 1,200 square feet to less than 800 square feet. Moving auxiliary services like conference facilities, libraries, storage, and reprographics to less expensive, lower-level space holds down costs even more. So as law firms continue to migrate east, the real question is: Will there be enough space? Most of the new development is happening in the East End now, but perhaps the next great frontier will stretch the boundary again and move to the NoMa (North of Massachusetts) area near Union Station. Jones Day’s move to 51 Louisiana Ave., a year ago, may lead other firms to settle even farther east, toward the Capitol. One thing is sure: To acquire space in top buildings, law firms must plan years in advance and make decisions quickly or risk missing out on the great migration. Shannon Small is vice president of marketing for Akridge ( www.akridge.com), a full-service real estate firm based in Washington.

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