A deal between a major Washington law firm and the developers and owners of an office building at the site of the old Greyhound Bus Terminal in the District has fallen through, leaving the developers of the property scrambling to fill the 12-story building, officials of both firms confirmed yesterday.
Officials of the law firm of Arent, Fox, Kintner, Plotkin & Kahn said yesterday that the transaction, in which they would have leased more than half of the total office space in the building, located at 1100 New York Ave. NW, failed because the developers were unable to find tenants to sublease the firm's current office space at Washington Square on Connecticut Avenue.
"We have the entire building back on the market now," said Irving Lieberman, leasing manager for Manulife Real Estate Inc., the Toronto-based owner and developer of the building. Lieberman added that Arent, Fox's plans to rent the top six floors of the building "would have been the biggest deal of the year if it had gone through."
The commercial real estate market in the District has recently been suffering from an abundance of office space, and real estate experts are worried that the situation will worsen because of the economic slowdown.
"It's a terrible blow to the confidence of the Washington financial community when one of those deals fall through," said one real estate broker, who noted that because law firms rent so much downtown space they are considered vital to the overall health of the commercial real estate business.
"It's possible that law firms are being more cautious" in looking for larger spaces, said Rodney F. Page, managing partner of Arent, Fox.
Arent, Fox took an aggressive approach to the negotiations, asking that Manulife assume responsibility for subleasing the 175,000 square feet the law firm now occupies at 1050 Connecticut Ave. NW on a lease that doesn't expire until 1997. Manulife has been attempting unsuccessfully to sublease that location for the last six months, the law firm said.
Arent, Fox, a growing law firm of 246 attorneys, is back in the market looking for more space, said Page.
The development at 1100 New York Ave. involves refurbishing the original Greyhound terminal, considered a historic landmark, and includes retail space on the ground floor and office space above. The building is scheduled to open in June 1991.