A national law firm secured a new, high-profile location in Washington, D.C., by subleasing newly renovated office space that had been built out and put on the market in an area where workplaces are getting harder to find.
Bradley Arant Boult Cummings, a firm with 13 offices including its headquarters in Birmingham, Alabama, agreed to sublease 28,251 square feet from fellow law firm Dentons at 1900 K St. NW, according to Savills, the brokerage that represented Bradley. Dentons is the building's largest tenant, according to CoStar data.
The space at the heart of the city’s K Street corridor, an area synonymous with powerful consulting and legal groups, provides a highly visible example of how the lack of demand in major office markets across the country hasn't affected top-tier workspace as much as lower-tier real estate.
From New York City to Chicago, the ability for the high-end space in the market to keep drawing leasing demand has been referred to ask a flight to quality, a trend that some real estate pros say could lead to a shortage of Class A office space in some areas.
Dentons recently built out the space, and Bradley made minor adjustments to areas that clients would see, Savills said. Bradley is expected to relocate from about 33,000 square feet on two non-contiguous floors just blocks away at 1615 L St. NW. That office was built in the 1980s and renovated in 2018, CoStar data shows.
“Bradley’s decision to relocate was driven by a clear objective: to secure a high-quality, modern workspace while achieving significant cost savings,” Michael Koplan, Bradley’s D.C. office managing partner, said in the statement. “This move allows the firm to enhance our office environment without disrupting an in-place renovation, enabling time and resources to be directed towards providing our clients with the best possible service."
Financial services group TIAA owns the 13-story 361,200-square-foot building at 1900 K St. that was built in the late 1990s and renovated in 2023, according to CoStar data.
Potential space shortage looms
Conor Sen, an Atlanta investment adviser who tracks the office market and writes on the topic, said the desire for quality office space in major markets likely will result in "a shortage of class A space in class A submarkets much sooner than people realize." The shortage would develop, in part, because of the cost and time required to develop top-tier office buildings, he said.
"Something that’s becoming more clear in the data is that even if 2025 office demand is down vs 2019, the supply of office that’s seen as acceptable for modern business culture is down even more," Sen wrote in a LinkedIn post. "Trophy space in Midtown Manhattan is already very scarce, and that’s going to flow through into class A space in the best submarkets around the country."
One of the Savills brokers who represented Bradley in the K Street deal agreed that the space is getting harder to find. “There is limited high-end inventory, while many major law firms are seeking to shed space,” Savills Vice Chairman Tom Fulcher said in a statement. “This provides an opportunity for our law firm clients to get modern, high-end offices at a fraction of the cost of building out new space. We have seen a number of these types of transactions recently and expect to see more moving forward."
While the Washington market continues to grapple with an overall vacancy rate of 17%, a positive sign for office owners has emerged as construction levels for new office buildings have fallen to 30-year lows, according to a report from CoStar Market Analytics.
The 1900 K St. building, with other tenants including law firm Dechert, features a fitness center, a terrace, a penthouse lounge and even rooftop beehives to facilitate the pollination of urban flora, according to the building website.
Freshfields signed a deal to expand its footprint in the city and McDermott Will & Emery committed to a lease at a tower planned for downtown.
For the record
Savills’ Managing Director Adam Brecher negotiated the deal on behalf of Bradley with Fulcher. Dentons was represented by JLL’s Elizabeth Cooper and Bobby Blair.