Hunton & Williams law firm will keep downtown location
- April 3, 2013
After considering alternative locations and new construction, a major Richmond law firm is staying downtown. Hunton & Williams is renewing a lease for space in the east tower of Riverfront Plaza. However, like firms across the country, it is taking less space.
John O’Neill, managing partner for Hunton’s Richmond office, said instead of the nearly 310,000 square feet the company leases now, the firm will occupy between 257,000 and 260,00 square feet when the new lease takes effect in 2015.
“We, like everyone else, need to be mindful of what our costs are. If we can do what we do in a smaller space, then there’s no reason to hang on to space we really don’t need,” O’Neill said.
The firm doesn’t need as much space for storage or physical records as in the past, noted O’Neill. Plus, it has moved some records and machines offsite. He doesn’t anticipate any change in the number of Hunton & Williams employees — including 247 lawyers — who work at Riverfront Plaza.
O’Neill wouldn’t say much the space reduction will save the company on its new lease, which is in the process of being finalized. “It’s just a question of getting the document written,” he said. “The material business terms have been agreed to.”
Asked if the company received strong concessions for staying, O’Neill said, “Suffice it to say, we are very pleased with the economics of the relationship going forward.”
The firm, part of the original development team for Riverfront Plaza and its twin tower, moved into the building in 1991. Hines, an international real estate firm with a U.S. headquarters in Houston, owns the 21-story office tower, which offers expansive views of the James River.
“Quite frankly, as we went through the process of what to do, we did look diligently at alternatives and investigated other locations,” said O’Neill. “We did investigate new construction. We had opportunities presented to us, and we reviewed those with a great deal of care. There was one case we looked at very seriously. But at the end of the day, with Hines being a good partner with us, and with the space having held up so well for 20 years, it made more sense for us to stay here.”
Hunton’s decision means that three of the city’s major law firms have decided to stay downtown. McGuireWoods plans to be the lead tenant in Gateway Plaza, a new 15-story tower that could get under way in June on what is now a surface parking lot bounded by Eighth and Ninth Street. The developer for the $110 million project is Chicago-based Clayco.
McGuireWood’s lease in the James Center, where it has been located since 1985, expires in August 2015. The company will vacate about 244,000 square feet of space, and expects to lease 217,000 square feet in the new building.
LeClairRyan also has leases expiring in 2014 and 2015. It occupies about 200,000 square feet at two locations, including the east tower of Riverfront Plaza. There’s no word, yet, on LeClairRyan’s plans.
Williams Mullen moved from the James Center into a new $62 million high-rise at Tenth and Canal Streets in June 2010. It was the lead tenant for the project, developed by Virginia Beach-based Armada Hoffler, and the building is known as the Williams Mullen Center.
Hunton’s lease renewal and McGuireWoods’ preference for new construction will leave large blocks of office space on the downtown market. Steve Gentil, a partner in the Richmond office of Colliers International, says the openings represent opportunities for other companies to move downtown. Speaking of the James Center on East Cary Street in the heart of the city’s business district, he said, “That location is still in the center of the bull’s eye where people want to be.”
Other brokers, though, say filling several large blocks of space in the same area will be a challenge. The upside is that prospects might be able to get a good deal on Class A space. The downside? A tenants’ market will push rental rates down, and landlords will be forced to offer concessions.