Prestigious firms relocate downtown

Prestigious businesses are helping make the now-familiar “L.A.’s the Place” a real, live slogan.

They are providing proof again of the old economic maxim of supply and demand.

Particularly in downtown Los Angeles, where the availability of office space has never been greater, the influx of prominent national and professional firms continues to evolve, led by financial services, banking and legal firms.

The latter, particularly, are relocating to downtown towers from other local areas and law firms from other cities and other states are opening offices here as well.

“Overall, Los Angeles is attracting a record supply . . . (of new tenants) and it will take between two and three years to absorb all the new development being constructed,” according to Howard Sadowsky, senior vice president here of Julien J. Studley Inc., commercial realty specialists.

“But we have tremendous depth in the market and we continue to attract users from everywhere who sense the business environment and see the opportunities and say, ‘I must be in Los Angeles,’ ” he added.

While more than 15 million square feet of space is under construction now, the demand for it has accelerated at almost the same pace, he noted, as more and more firms feel that “downtown has become an environment where they feel they have to be located.”

The corporate newcomers include Sullivan & Cromwell and Sherman & Sullivan, both from New York, and Mayer, Brown & Platt from Chicago. Firms already here have decided to make the move to downtown Los Angeles and they include New York-based Finley, Kumble, Heine, Underberg, Manley & Casey and Cleveland-based Jones, Day, Reavis & Pogue. All have taken major amounts of space.

Sadowsky notes that in the “rush to downtown,” many firms are breaking traditional barriers. No longer is Bunker Hill considered the “do-or-die” location for law firms, as evident by the lucrative leasing deals made south of there.

Law firms have been able to negotiate rents for as low as $21 a square foot because building owners are looking for the type of prestige tenancies these major law firms represent, Sadowsky said.