One of the biggest catches in Boston’s downtown office market has decided to stay put. The law firm Mintz Levin is renewing its lease at One Financial Center, across from South Station.
The decision, which Mintz Levin reached after a citywide search for space, takes one of the largest potential tenants in Boston’s office market out of contention at a time when several major office projects are trying to land a tenant big enough to underwrite construction. Some 4.1 million square feet of new office space for central Boston is either permitted or under review.
For Mintz Levin, which has about 270 lawyers in Boston, the decision was fairly straightforward, said managing partner Bob Bodian. The firm is comfortable in One Financial Center and wanted to stay close to both clients and South Station.
“Our people like it here,” Bodian said. “They’re accustomed to it. It’s convenient. And we feel like some of our clients identify us with this space.”
Like many other law and professional services firms these days, Mintz Levin is slimming down, going from about 250,000 square feet on nine stories to 205,000. It will renovate those offices next year, Bodian said, expanding conference facilities but shrinking attorneys’ offices.
“It’ll be much more efficient, modern space,” Bodian said.
But other blue-chip downtown companies lately have gone with a new custom-built building. Goodwin, PricewaterhouseCoopers, and Boston Consulting Group have relocated or are moving to new buildings in the Seaport. Mintz Levin considered new construction, Bodian said, but ultimately decided it likes the easy access to Boston’s busiest train station.
“Transportation was the principal issue, I’d say,” Bodian said. “There’s a lot of nice things about the Seaport, but at the end of the day we thought staying where we are made the most sense.”
Mintz’s decision also highlights how few large blue-chip tenants are in the downtown office market right now. At 205,000 square feet, Mintz’s lease is nearly double the size of the next-biggest office space up for grabs right now, according to data tracked by the real estate firm Colliers.
While there are more than 250 companies in the market for office space downtown, most are much smaller. The average request for space is about 25,000 square feet — which would maybe fill one floor in One Financial, said Aaron Jodka, director of research at Colliers. Meanwhile, technology companies — one of the fastest-growing sectors in downtown Boston in recent years — have tended to prefer lower floors and older buildings to premium space in high-rise towers.
That could make it difficult for developers of several office towers to find enough tenants to finance construction.
Boston Properties has said it’s likely to wait to sign anchor tenants before building planned towers at Back Bay Station and North Station. So has HYM Investments, which is permitted for a 1 million-square-foot office tower at the Government Center Garage.
The development company Hines has said it will launch its South Station Tower, with 704,000 square feet of office space, on a speculative basis without tenants. But that project is still awaiting approvals from the Massachusetts Department of Transportation. Other major towers, such as Millennium Partners’ proposal for the Winthrop Square Garage and Don Chiofaro’s Boston Harbor Garage skyscraper, are further from construction but could be permitted and competing for tenants by this time next year.
Still, there will be more big fish to catch in the future if Boston’s economy remains strong, Jodka said. And those towers will have an attractive lure.
“Building new, you can offer a really interesting new environment for a firm that wants to attract and retain workers and anchor a whole new corner of the city,” Jodka said. “And imagine the naming rights on one of those towers.”
Mintz Levin, though, was looking for something a little more subdued. The 1980s-vintage tower where the law firm has spent the past three decades has no outside sign or anything especially flashy. But business has been good — the firm’s revenue is up by one-third in the last two years, Bodian said — and the partners are comfortable. So they decided not to rock the boat too much.
“Our new lease is going to run through 2034,” Bodian said. “We feel like we’re putting the firm in good position for the next couple of decades.”