Unable to get Sears Tower’s ownership group to engage in early lease renewal negotiations, giant law firm Sonnenschein Nath & Rosenthal LLP has hired Jones Lang LaSalle Inc. to test the market on a possible move from the iconic skyscraper.
Sonnenschein is the fourth-largest tenant in the 110-story structure, with about 205,000 square feet, accounting for about one tenth of the building’s annual rental revenue, according to a 2007 financial summary of the building by lender UBS A.G.
In addition to that space, Sonnenschein subleases roughly 50,000 square feet from another tenant. Sonnenschein, whose lease expires in 2014, is just one of four big tenants considering leaving Sears Tower.
Landlords often do not engage in lease renewal negotiations until pushed to do so, acknowledged real estate lawyer Linda White, a Sonnenschein partner who is heading up the firm’s review of its space needs. Sears Tower’s owners, which include Skokie-based American Landmark Properties Ltd., are apparently no exception.
“I went to the building, and they have not reacted,” Ms. White said.
A timetable for a decision on whether to move, and where, has not yet been set, she said.
“We would like to get out to the market as quickly as we can possibly can, so that we can see what the alternatives are, and whether or not we can renegotiate here, or if we are really going to be forced out into the marketplace entirely,” she added.
A spokesman for the building’s owners said, “While we understand that our tenants need to take steps to ensure they are making the best business decisions, we remain confident that the Sears Tower is the best location for their long-term business objectives.”
Sears Tower signed about 100,000 square feet of leases last month alone, said the spokesman for the owners, which also include New York investors Joseph Chetrit and Joseph Moinian.
Recruiting is a key factor for big law firms such as Sonnenschein, which had revenue of $478 million last year.
As a part of a review of its space needs, Sonnenschein is expected to consider several factors, including what effect anxiety about a terrorism attack on Sears Tower might have on hiring.
“Some of my partners … would tell you it has had an impact; talk to others, and they don’t think it has,” Ms. White said.
Sonneschein becomes a likely candidate for one of the proposed new office towers. In the last year of its lease, Sonnenschein will pay a net rent of more than $39 per square foot, not including taxes and operating expenses, sources said, a figure in line with the rents charged in the newest buildings.
Ms. White said the $39 per square foot figure was “close” to the actual rent.
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.
Leave a Comment