Newly formed law firm Fitzpatrick & Hunt Tucker Collier Pagano Aubert LLP has signed a 10-year lease for 17,500 square feet of downtown L.A. office space, according to a source with knowledge of the transaction.
The $4.5 million deal at the U.S. Bank Tower is said to typify the state of the downtown office market.
With the economy mired in a protracted slump, landlords have had to offer sweet deals to retain or gain tenants. It’s reflected in asking rents that over the past year have fallen nine cents to $3.27 per square foot by the end of the first quarter.
But it isn’t just lower rental rates that landlords are offering. It’s a variety of other inducements, and in the case of Fitzpatrick & Hunt, landlord MPG Office Trust Inc. agreed to provide used office furnishings worth about $250,000, according to Andrew Lustgarten of Studley, who represented the law firm.
He said the offer helped seal the deal.
“I do think this deal was able to be structured (this way) due to the current economic climate,” said Lustgarten, who believes landlords won’t be able to raise rents for perhaps two years.
Other financial terms were not disclosed.
The firm was formed by former partners of Mendes & Mount LLP’s aviation and space practice. It has offices in Los Angeles and New York, where the firm is headquartered. Twelve attorneys, much of whose work involves representing aerospace manufacturers, will be based in downtown Los Angeles.
Partner Garth Aubert said the firm was looking to minimize costs, and that’s where the furniture came into play.
“As a startup law firm, that was a material factor for us,” said Aubert. “We negotiated the right to survey the vacant space.”
In the end, the firm decided to take everything from lamps to desks to bookcases from offices formerly occupied by Latham & Watkins LLP, which vacated a large block of space several years ago.
Fitzpatrick & Hunt is taking the entire 60th floor, which needs few upgrades because it previously housed another law firm. The firm doesn’t need all the space, so the lease is structured to allow it to only pay for the space it uses while leaving room for expansion.
MPG Office could not be reached for comment.
It was represented in-house by Josh Wrobel. The tenant was also represented by David Gordon of Studley.
Breaking Ground
The Villas at Gower
1726 N. Gower St., Hollywood
Description: 70-unit, four-story building providing permanent housing for homeless adults and families with special needs. The building, expected to be completed in October 2011, was designed by Wade Killefer of Killefer Flammang Architects. Construction began July 1.
Developers: A joint project of non-profit development corporations A Community of Friends and PATH Ventures; land leased from the Community Redevelopment Agency of Los Angeles.
Cost: About $30 million, including $5.8 million paid by the CRA and Los Angeles Housing Department to buy the land.
Details: Dora Leong Gallo, chief executive of Community of Friends, said it took a lot of work to convince the community that the project, just a few blocks from the W Hotel Hollywood, would be a good fit. Killefer said the community responded positively after seeing plans for it. “We listened to them and got a sense of what they wanted and showed it to them and they said, That’s perfect.’”
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
