Brownstein Hyatt Farber Schreck and Simpson Thacher & Bartlett are fighting over space on the 11th floor of 1155 F St. (Photo: Diego M. Radzinschi/ALM)
As it seeks extra space for its downtown Washington, D.C., office, Brownstein Hyatt Farber Schreck is suing Simpson Thacher & Bartlett, its landlord, and the arbitration company JAMS Inc., a new tenant, over a subleased part of its building at 1155 F St. NW.
Brownstein has subleased about a floor and a half from Simpson Thacher since April 2015, according to a breach of contract complaint and other filings in D.C. Superior Court last week.
More than a year ago, the suit says, Simpson Thacher’s real estate broker twice asked Brownstein if the firm wanted more space in the building. Brownstein didn’t want the space then, but the firm says it does now.
Here’s the problem, according to the complaint: Simpson Thacher’s real estate broker looked for other tenants to take the open space. In October, JAMS agreed to move into the empty part of Brownstein’s floor.
Brownstein claims Simpson Thacher never formally notified the firm that the space would go to someone else, and Brownstein should have had 10 days to decide. Instead, the two law firms communicated through their brokers.
“Had Simpson Thacher provided the required notice, in the required form, and with the required content, Brownstein would have” taken the space, the firm says.
In addition to the disputed square footage, Brownstein wants Simpson Thacher to pay unspecified damages. The Colorado-based firm said construction next door in D.C. would disrupt its lawyers and lobbyists at work, and that it needs the space because “the law firm is bursting at the seams,” Brownstein’s attorney, Randy Miller of Venable, said during a court appearance Thursday.
At the hearing, D.C. Superior Court Judge John Bayly Jr. declined to stop JAMS from continuing its construction, denying Brownstein’s request for a temporary restraining order. The next hearing is set for March 3.
Simpson Thacher’s lawyer, Jennifer Wollenberg of Fried, Frank, Harris, Shriver & Jacobson, said in court she would like to start discovery, including collecting documents and taking depositions, as soon as possible. She declined to comment further, as did the attorneys for Brownstein and JAMS.
JAMS said it plans to move out of its current space on 13th Street by April 30, when its lease expires, but it stopped construction on the new space Feb. 13 because of the litigation. “They [Brownstein] don’t have a deadline … JAMS does,” William Charron of Pryor Cashman, who represents JAMS, told the judge. JAMS’ sublease with Simpson Thacher lasts through 2025.
The space at issue is part of Simpson Thacher’s former offices in Washington. Simpson Thacher is now located in a new building about two blocks away on G Street. Simpson Thacher has about 50 lawyers in Washington, while Brownstein has about 35 lawyers and lobbyists in its office here.
Other law firms in the F Street building include Munger, Tolles & Olson; Shook, Hardy & Bacon; and Bryan Cave.
Subleases between firms are common in the Washington, D.C., real estate market, where law firms historically take up about a quarter of office buildings. Lately, firms have been working to shrink their footprints, potentially creating even more subleased space.
Brownstein gives several reasons why it needs an extra half a floor, according to the court filings. The firm has extended five job offers in the last month, it said. And it wants all its professionals on the 11th and 12th floors — connected by an internal stairwell — because of the way its lobbying practice, the second-largest in the city, works.
The firm said it plans to hold meetings, fundraisers and events — the hand-shake heavy foundation of any lobbying practice — in the office, “with our professionals going up and down the stairs on a regular basis.”
The complaint also discloses details of Brownstein’s lease. Across a floor and a half, the firm occupies about 24,400 square feet. The rent cost Brownstein $1.075 million a year beginning in 2016 — which breaks down to almost $90,000 a month, or $44 per square foot. The lease agreement outlined how that rent would increase each year for a decade beginning in September. An email sent by Simpson Thacher’s real estate broker last February said the rent for the extra, now-disputed space, could be as low as $59 per square foot.
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