Jackson office space owner Parkway Properties is pulling out of the Jackson market. In my opinion, Parkway’s exit is a reflection on the ongoing recession in Mississippi’s legal sector.
In this controversial post from August 2011, I discussed what a Republican controlled Mississippi House of Representatives would mean for the legal profession. I stated the following regarding the impact on the Jackson economy:
There would be negative repercussions in the local economy of Jackson, where the legal industry ranks behind only the government and medical industries as far as jobs. Owners of office space such as Parkway Properties would suffer due to the declining demand for office space.
In November Republicans did gain control over the House of Representatives. Two months, later Parkway Properties has seen enough and is selling most of its Jackson office space.
Amy McCullough with the Mississippi Business Journal has this article on Parkway exiting the Jackson office space market. McCullough asks the logical question of whether the sale will lead to layoffs among Parkway’s 89 Mississippi employees.
The MBJ article states:
Parkway’s downtown Jackson assets that it is selling are: One Jackson Place, 111 Capitol Building, Pinnacle at Jackson Place, Parking at Jackson Place, and UBS Building / River Oaks Place. The company currently retains the City Centre building at 200 South Lamar Street.
Who are major tenants of those buildings? Law firms. Shrinking law firms.
Pinnacle at Jackson Place is the new building that houses Brunini and the Jackson office of Jones Walker (formerly Watkins Ludlam). Jones Walker bought Watkins Ludlam and promptly started firing lawyers. Word on the street is that the Jones Walker footprint in Jackson will continue to shrink as other lawyers are forced to retire or otherwise exit in the next few years.
One Jackson Place used to be home of the U.S. Attorney’s Office, but the office has now moved into the new federal courthouse. Across the street is the Regions Building that used to be the home of Butler Snow and the University Club.
111 Capital Building is the former home of Phelps Dunbar’s Jackson office. But Phelps’ Jackson office has shrunk and is now housed in smaller space in the Meadowbrook Office Park where Baker Donelson has its offices.
Parkway explains that it expects to expand by focusing on core growth markets like Orlando, Tampa and South Florida. Left unsaid in that statement is that Parkway views Jackson as a market in decline. I bet that Parkway has close to zero employees in Jackson in a few years.
This is an example of what I talked about in the August post about how the decline in the legal sector spreads to other areas of the economy. A recession in the legal industry does not only affect personal injury plaintiff lawyers. It does not affect only lawyers and their employees. It reaches into other industries and impacts people who had no idea that their job depended on a healthy legal sector. Parkway Properties sees this and is leaving.
As I stated in Monday’s post, I expect “stuff” to really hit the fan in 2012 for the legal sector in Mississippi. The Parkway exit gets the year of bad news off to a fast start.