With stone flooring, glass conference-room walls, a private stairwell and a lounge with ventilation that sucked the cigar fumes from the room, the high-rise headquarters of law firm Gordon Silver conveyed a message: success.
It cost a lot to look that good and live that large, with monthly rental rates of about $160,000, according to the landlord.
But Gordon Silver, hollowed out by waves of defections this year, has moved across town to a small, low-priced office suite, leaving a gaping hole in what’s widely viewed as Las Vegas’ top office park.
Gordon Silver last month moved out of the Hughes Center, where it rented the top three floors of a nine-story building. The roughly 54,000-square-foot office was gutted in a multimillion-dollar renovation not long ago, with the landlord reportedly footing much of the bill, and one lawyer says it’s a “beautiful” place that was built “to impress somebody.”
Down to a skeletal staff after numerous lawyers, including its namesake leaders, quit this year, Gordon Silver now is based in a 2,883-square-foot office. The suite is tucked away on the first floor of a three-story building on Rainbow Boulevard near the U.S. 95-Summerlin Parkway interchange.
The Gordon Silver law firm has moved into an office building at 500 N. Rainbow Blvd., as seen Saturday, July 18, 2015.
Management signed a six-month rental contract and paid the entire amount, $21,622.50, in advance.
The firm was one of the biggest tenants at the Hughes Center by space rented, and its move out is a big setback for the landlords, who bought the 68-acre office park less than two years ago and have been working to fill the once-packed property.
The owners are suing Gordon Silver for unpaid rent, alleging it owes about $786,000.
Local office brokers are mixed on whether the landlord, Wall Street heavyweight the Blackstone Group, can quickly fill the vacancy.
The three floors are designed for a law firm, one broker pointed out, adding that “only a couple of users in town are big enough to take all of it.”
Generally, prospective office tenants have plenty of options in Las Vegas; the valley’s office market, still bruised by the recession, has a vacancy rate of about 20 percent. But broker Soozi Jones Walker said there is a shortage of large, contiguous spaces, and other users besides law firms flock to “dense” space, or floors without open bullpen areas.
Gordon Silver's new offices at 500 N. Rainbow Blvd. in Las Vegas, as seen Monday, July 20, 2015.
The monthly rental rate in Gordon Silver’s former building, 3960 Howard Hughes Parkway, is $2.90 per square foot, listings show. That’s above the valley average of $2.62 for Class A, or high-quality, offices and far above the average $1.91 for all space, according to Colliers International data.
Still, the office park is a status symbol. It has prominent tenants, is near the Strip and McCarran International Airport, and offers a cluster of high-quality buildings.
“You’re looking for image” at the Hughes Center, said Walker, owner of Commercial Executives Real Estate Services.
Management has been trying to find one tenant for Gordon Silver’s old space, or at least a user that could take two of the floors, said Hughes Center listing broker Taber Thill, of Colliers.
The law firm left behind some furniture and equipment, and Thill is not sure what will happen to it all. But, he said, the office is in “great shape.”
He said his group has given "quite a few tours" of the space and a few parties "have expressed interest."
Blackstone bought the park in September 2013 for $347 million. According to Thill, the property was about 68 percent occupied at the time and was 77 percent occupied before Gordon Silver moved out.
By comparison, the park was 97.7 percent occupied in 2004, securities filings show.
To boost business, Blackstone has renovated vacant suites and is building a 12,000-square-foot retail plaza with lower-priced, casual dining options.
The law firm Gordon Silver once occupied three floors totaling about 54,000 square feet at this office building at 3690 Howard Hughes Parkway. The firm has moved to a 2,883-square-foot furnished suite at 500 N. Rainbow Blvd.
John Woo, portfolio manager for the Blackstone unit Equity Office, referred questions about Gordon Silver’s former offices to attorney David Carroll, who is representing the landlord in its suit against the law firm.
Carroll did not return a call seeking comment.
Woo, however, said Gordon Silver was “one of the larger tenants here,” and that its office renovation was launched by the park’s previous owners and was nearing completion when Blackstone took charge.
The overhaul cost more than $100 per square foot, according to Thill, or more than $5.4 million. The landlord paid a large portion of that, real estate pros said.
The offices have custom cabinets; glass-walled conference rooms; stone flooring; butler’s pantries for catering; a large coffee bar; a private stairwell between the eighth and ninth floors; and a well-ventilated cigar-and-poker room, Thill said.
That room was about the same size as a regular office. It had a bar, television, couch and built-in counter with a sink, and was dubbed the “partners’ lounge,” according to a real estate broker who’d been there.
Lawyer Terry Coffing, of Marquis Aurbach Coffing, said the offices were similar in quality to those of other influential law firms but nonetheless were “some of the nicest in town.”
“As soon as you exited the elevators, you knew you were visiting a successful law firm,” said Charles Van Geel, vice president of sales and leasing for commercial-property owner American Nevada Co.
Gordon Silver's current managing shareholder, Mark Dzarnoski, said the firm had “a pretty beautiful office” and that as a pipe smoker, he made use of the partners' lounge.
“It was my favorite room,” he said.
Known for its bankruptcy practice, Gordon Silver had 39 local attorneys as of last spring, making it the sixth-largest in the valley at the time, according to VEGAS INC research. The firm traces its roots to the 1960s.
But its lawyers, for still-unconfirmed reasons, have been streaming for the exits this year, including the firm’s namesakes, Gerald “Jerry” Gordon and Jeff Silver.
Gordon did not respond to requests for comment for this story, and Silver referred questions to former managing shareholder Greg Garman, who did not respond to an email.
Roughly 15 Gordon Silver attorneys, including Gordon, left a few months ago to launch a new firm, Garman Turner Gordon. Thirteen other lawyers — seven in Las Vegas and six in Reno — bolted en masse last month for rival Dickinson Wright.
The firm was down to just two lawyers earlier this month.
Owners of the Hughes Center sued Gordon Silver last month in Clark County District Court, alleging in court filings that the law firm’s “failure to pay rent is the result of severe financial problems, which have been further exacerbated by the departure of numerous partners since January 2015.”
The landlord, which says Gordon Silver's monthly rent was about $160,000, is seeking the appointment of a receiver to take control of the firm's finances, property, mail and other assets, court papers show.
Dzarnoski told the landlord around May 29 that the firm would leave the Hughes Center, and it began moving out the night of June 5. It was open by June 8 in its new office on Rainbow, the firm said in court filings.
Justice of the Peace Cynthia Cruz, of Las Vegas Township Justice Court, issued an eviction notice June 16 for Gordon Silver's old offices.