Negotiating for move to smaller Trumbull St. location
April 24, 2006
By MATTHEW L. BROWN, Hartford Business Journal Writer
Day, Berry & Howard, the state’s largest law firm, may soon be ditching the state’s largest office tower.
The law firm confirmed to the Hartford Business Journal that it is close to finalizing a deal for new space at 242 Trumbull St., which sits at the corner of Trumbull and Pratt streets. Day Berry would take over roughly 85,000 square feet of space vacated by the MetLife insurance company.
The law firm currently occupies the 23rd to 26th floors at CityPlace I, the city and state’s largest office tower. It has several years left on its lease term, but both CityPlace and 242 Trumbull are owned by Northland Investment Corp.
Sources close to the negotiations said price is a significant factor driving Day Berry’s consideration of abandoning CityPlace.
Christopher J. Ostop, vice president of Jones Lang LaSalle Americas Inc, City Place’s leasing manager, said Day Berry would get a lease rate “below market rate.”
Rates for Class A space in downtown Hartford for a tenant as large as Day Berry are roughly between $20 and $22 per square foot, downtown brokers said.
Day Berry’s potential lease “will likely be structured direct with the landlord, Northland Investment Corp., however, it will be subsidized through a Met Life lease buyout,” according to a Jones Lang quarterly market report.
“It’s cheaper than a direct deal,” Ostop said, “to cut a deal first with Met Life. It gives [Day Berry] a great opportunity to lease at below market rate.”
Michael Elsass, vice chairman of DBH’s executive committee, said the firm’s space at CityPlace no longer conforms to its needs. “The model for law firm design has changed significantly,” he noted. Law firms employ more technology, fewer support staff, and different space layouts for attorney offices.
Originally intending to move out into “swing space” while its CityPlace officers were retrofitted, those discussions led to the current negotiations, which would see the law firm moving permanently out of the office tower.
“We are very much intrigued by the idea of doing something new,” Elsass said. “We very much want to be part of Hartford’s revitalization. When you look out our windows at CityPlace, you see the city, but you’re not part of it. This would put us closer to the street, where we can actually see people.”
Law firms generally prefer signature buildings, and large law firms have been a mainstay of CityPlace and other office towers. CityPlace I and II boast 16 law firm tenants between them. Day Berry has been a major tenant since the building opened in the late 1980s. The eight-story Trumbull Street building was renovated by Aetna Realty Investors in the late 1980s.
Day Berry is Connecticut’s largest law firm, with annual revenues in excess of $115 million. The available space at 242 Trumbull – also known as the Standard Building – is equivalent to the amount of space the law firm is currently leasing.
The Standard Building is about 338,000 square feet and is also home to UBS Realty and a number of other, smaller tenants, including the retailer Stackpole Moore Tryon and the nightclub Sweet Jane’s.
Peter Giuliani, a Smock Sterling consultant on law firm business practices, said it’s unusual, but maybe not surprising, that Day Berry is looking to leave such a prestigious building.
“As for the marketing aspect of not being in the state’s trophy building, I’m not sure that matters anymore,” said Giuliani. “I’m not sure if clients really care what building they’re in.”
Elsass said that he expects the space to be “very accomodating to clients.” He said the building is “much more personal” than CityPlace.
“I scratched my head with it, too,” Ostop said, “but the partners drive the bus.”
Annual profits-per-partner at Day Berry are roughly $525,000.
Ostop said Jones Lang LaSalle has no prospective tenant for the CityPlace I space, and noted, “the deal’s not done yet.” Day Berry is “on the hook at CityPlace until that lease ends, it’s got a couple of years left. Nothing is a definite deal.”