After 31 years at the Philadelphia Stock Exchange Building (1900 Market St.), when law firm Cozen O'Connor decided to move its headquarters (the firm has 173 "shareholder" partners, 376 additional lawyers, 620 support staff, nationwide) decided it was time to move its headquarters, partners thought briefly about leaving town.
"Many of the shareholders live in the suburbs. That was part of our debate -- can we move out? Can we have free parking and avoid the city wage tax? Can we have a shorter commute and run out to the kids' baseball games?" asked Vincent McGuinness, the Cozen managing partner who headed the committee in charge of the move.
But Cozen does a lot of business with public agencies; the city is a central location for commuters in NJ and PA; it's a buyer's market, these days, for office space, with Center City rents stuck around the $20-something-a-square-foot levels of 10 and 20 years ago; and "we are committed to the city," says McGuinness. "If the city crumbles, the suburbs will crumble, too." Plus, "our younger generation of lawyers all are living in the city," and "my generation of lawyers, with the kids gone, is looking" to live downtown, too. So "at the end of the day the decision to stay in the city was easy."
Cozen says it wasn't offered any financial incentives for staying in town. (Contrast that with the brokerage and investment bank Janney Montgomery Scott, which accepted $11.5 million in state funds to move across Market Street earlier this year.)
Cozen plans to move to One Liberty Place, three blocks down Market St. -- in 2015, when the lease runs out (while current occupant Reed Smith is moving to Three Logan. Philly musical chairs.)
With relatively low rents attracting little new construction, it was tough finding 200,000 sq ft in Philadelphia, says McGuinness -- unlike the firm's branch cities, including Chicago, where "Sears Tower is a ghost town and you can get big blocs, small blocs, wherever you want." (Local rents around the country have come to reflect Midtown Manhattan rents; when they're up, like they were last year, top space in Center City Philadelphia can move "from $28 to $29" a sq. ft. as if in sympathy, he says.)
Companies like IBM, GlaxoSmithKline and Microsoft have cut their Philadelphia-area office space as more employees work from home, using modern gadgets. At the exchange (where the basement-level trading and tech business is now owned by Nasdaq's stock-options division), traders who once filled most of the building (along with developer Bill Rouse's office, now a Cozen conference room) have mostly moved to remote locations.
Yet Cozen is taking nearly as much space as it's moving out of. "In the law, professional development really requires intepersonal, regular interfacing. There's a huge value in having a young lawyer down the hall, so if a question comes up she can walk into my office. Maybe I'm old school. But there is a huge value in face-to-face; it helps develop a skill set, in terms of how to communicate with clients, with juries, when you are arguing a matter with a judge."
It's not the same space exactly -- partner offices will be maybe 10 percent smaller, conference rooms are being expanded to include couches and informal settings, there'll be more common-room informal "touchdown spaces" and coffee shops like McGuinness saw on a design visit to Latham & Watkins in Los Angeles. The library is being cut 75% as books are thrown out.
"It hurt," he said, to throw out his own work product when he recently moved his own office across the building after 25 years. "But nobody needed it anymore," and everything's on electronic copy these days anyway. Paper files aren't going away; older lawyers still prefer them.
What's next for the Stock Exchange building? The block-long structure, with its ceiling-to-basement atrium, has attracted apartment-conversion interest (developer Ron Caplan is turning the nearby AAA building into apartments, too.) With projects like the nearby Murano condos and a planned Brandywine Realty Trust/Independence Blue Cross apartment tower linking the JFK Boulevard apartment district with residential Rittenhouse Square to the south, Center City is less business-oriented, more residential.
It's a big change, to McGuinness: "Back in 1981 this area was a little daring," with Market still lined with neon-lit porn shops and theaters and the inter-city bus terminal. "You watched yourself, walking to the car at night." The neighborhood's nicer now, and Cozen is moving just a little further downtown.