Smith law firm negotiates cut in USF&G rent

January 17, 1995|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

Smith, Somerville & Case LLC has restructured its lease commitment in the USF&G Tower, the latest top city law firm to take advantage of the depressed city office market and cut its rent amid a contracting and uncertain business climate.

As part of its new agreement with the insurer, Smith, Somerville will save hundreds of thousands of dollars and have unlimited expansion options in exchange for maintaining its offices in the 35-story skyscraper through the year 2009.

For USF&G, the new 60,000-square-foot lease will produce roughly $19 million in rental income over the 15 years, and keep the tower's occupancy level at 96 percent.

"We knew we wanted to stay here, and they wanted a tenant on a long-term basis," said Howard G. Goldberg, managing partner of the 75-attorney firm, which has a total of 200 employees. "We didn't want to go through the agony of relocating, because this building has everything we need. This way, we're set to go into the next century, which was our major objective."

Over the past two years, a number of the city's largest law firms -- including Miles & Stockbridge; Whiteford, Taylor & Preston; and Semmes, Bowen & Semmes -- have had to balance their desire for top-quality downtown buildings with a need to shrink overhead in the face of declining business.

Law firms' desire to renegotiate lease obligations also stems from improvements in computers that have eliminated the need for space previously devoted to law libraries, and given attorneys the ability to increasingly work outside the office.

"Virtually all law firms are dealing with issues of productivity, overcapacity and the desire to reduce costs," said Robert A. Manekin, a senior managing director of New York-based commercial real estate brokerage firm Julien J. Studley Inc., who represented Smith, Somerville. "No law firm we're aware of is experiencing significant growth."

Smith, Somerville has been headquartered on four floors of the 100 Light St. tower since 1977, four years after the 530,400-square-foot building was completed, said USF&G spokeswoman Kerrie Burch-DeLuca.

The firm's new lease will run concurrently with USF&G's own rental obligation on the tower, which was most recently valued by the state at $86.8 million. USF&G holds a master lease on the building, which is owned by Marbax Associates of New York.

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