WASHINGTON, DC-Don't let the shiny exteriors of Washington's trophy office buildings fool you. Some of them are nothing more than shells, hiding the lonely spaces left behind by the torrent of law firm mergers and dissolutions triggered by the tanking economy over the past year.

At Thelen's former offices at 701 8th St. NW, the firm's sign is still mounted to the outside of the building. Inside, though, the scenery is a bit jarring: Desks and chairs still in place, white marble floors still pristine, but not a soul in sight. A stack of Thelen letterhead left in a cubicle is the only evidence of what used to occupy the space.

"The art still hangs on the walls," says Andrew Ness, who was Thelen's DC managing partner when the firm closed down last October, and now practices at Howrey. "You could send a cleaning crew in there, dust things up over the weekend, and move in on Monday."

That's the problem. No one is moving in on Monday. And the 80,000 square feet of old Thelen space is up against a lot of competition in a market that DC commercial real estate brokers say is tepid at best. Heller Ehrman, another firm that didn't survive 2008 and has since been sued by its Washington landlord, has 78,000 square feet available. Firms like Ross, Dixon & Bell and Powell Goldstein, which were acquired by larger firms, are looking for subtenants. And some of the District's biggest players, such as Hogan & Hartson and Arnold & Porter, have put excess space up for sublease.

One bright spot, brokers say, is that space abandoned by law firms is already built-out, meaning new tenants wouldn't have to worry about buying office furniture or getting IT infrastructure installed. And although they're being cautious about committing to leases, brokers say there are still a few law firms on the market looking for new digs.

Thomas Fulcher Jr., from real estate firm Studley, says many of his law firm clients are asking only to see built-out space, because of the cost savings compared to moving into a freshly delivered building. He's taken them through the former offices of Thelen, Heller Ehrman, and Ross, Dixon & Bell. Still, he says, "No one's pulled the trigger."

TENANTS DEPART
That's particularly troubling for the firms forced to dissolve in recent months. Thelen, which Ness says was paying $55 to $60 per square foot for its District offices, or as much as $4.8 million a year, has stopped paying rent and is in default on its lease. Ness says the property's landlord, Wereldhave Management, has already been paid the amount of money that Thelen's bank guaranteed as part of the lease agreement. Brokers estimate the building's landlord will now ask for $64 or $65 per square foot for the space. "I don't know what else will happen," Ness says. "In part, it will depend on how fast the space is sublet." He admits that a lawsuit is "a possible remedy."

That's what happened to Heller Ehrman, which dissolved in September. Its 1717 Rhode Island Ave. NW offices, nestled next to St. Matthews Cathedral, are on the market for about $60 to $63 per square foot. MEPT St. Matthews LLC owns the space, and in October it sued Heller in state court in San Francisco--where Heller was based--for more than $31 million. Heller filed for Chapter 11 bankruptcy protection in December, putting a stay on the suit.

Richard Lane, a broker at West, Lane & Schlager, negotiated the Rhode Island Avenue lease for Heller in 2004 and 2005. According to a copy of the lease, Heller's rent started at $48.75 per square foot, or about $4 million a year. "It was a good deal," Lane says. "It was sort of like the last new-building, sub-$50 deal."

Lane predicts it won't be so easy for the offices' current brokers at CB Richard Ellis to work out a deal this time around. Aside from the economic reasons, he says demand for space in the District is down because most large firms are locked into their current leases for several more years, or committed to new space last year. Lane adds that the unique design of Heller's former offices, which are converted historic townhouses, could make things even tougher. "It's a very niche-y building. It's very quirky," he says. "It's very cool, but it's not for everyone."

One benefit, however, of having space from dissolved firms turned back over to landlords is that new tenants will be able to more freely negotiate the terms and lengths of their leases. Brokers say that makes those properties more desirable. Firms that have chosen to merge, on the other hand, are still responsible for their previous offices and consequently have to find subtenants, sometimes for leases with only a year or two left. Firms in those situations could end up settling for bargain basement prices. "Somebody in a sublease situation, they're looking to stop the loss. They're not trying to make a profit," Studley's Fulcher says.

Ross, Dixon & Bell, which officially merged with Troutman Sanders this month, is leaving behind 45,460 square feet at 2001 K St. NW with two years left on its lease. The price is listed as negotiable, but broker Gary Stein of CresaPartners says a subtenant could strike a deal there for less than $50 a square foot. However, it could help that, according to the firm, its landlord is open to converting the sublease into a longer-term contract.

Stein says Powell Goldstein's former offices at 901 New York Ave. NW could fetch a bit more. "It's very nice space. . .They won't quote anything, but my guess would be $60 to $65 [per square foot]," he says. Powell will move in with Bryan Cave--which acquired it this month--in the summer.

Powell's lease on 89,394 square feet doesn't expire until 2015. According to Greg Storrs of Boston Properties, which owns 901 New York Ave., Powell already subleased 11,269 feet of that space last year to Goodwin Procter, which also resides in the building. Storrs says Goodwin, as well as the property's other law firm tenant, Finnegan, Henderson, Farabow, Garrett & Dunner, are presently considering taking on more of Powell's space.

SHEDDING SPACE
At the same time, several of DC's most prominent Big Law players are looking to get rid of excess office space. With the economic forecast getting gloomier, it's a relatively painless way to trim fat from the expense side of the ledger.

Hogan & Hartson has 16,000 square feet on the market, available for up to eight years. Brokers estimate the space will go for less than $60 per square foot. Partner Bruce Parmley says the space was intended to be used for expansion, and that it won't officially become Hogan's until May. Despite the slow market, Parmley says Hogan initially had double the space available, but half has already been subleased.

Kirkland & Ellis is in a similar situation. The firm has 15,476 square feet on the market at $45 per square foot. The firm is looking for a subtenant for two to four years of the 10 years that it will have the space. Partner Daniel Attridge, chairman of Kirkland's DC operations committee, says Kirkland acquired the space to secure it for growth later on, and wants to sublease it for the short term to save some of the cost.

Arnold & Porter has 29,000 square feet on the market at 401 9th St. NW, which is not the firm's primary DC address. The space is available through June 2011. Brokers say it will go for less than $50 a square foot. Firm spokeswoman Patricia O'Connell says the DC office is "consolidating auxiliary spaces."

Cushman & Wakefield broker Louis Christopher says he expects the trend to continue. "There's going to be a lot more sublease space.We're not at the end of this cycle. We're closer to the beginning as it relates to companies and law firms," he says.

Even in a tough market, there's still a handful of firms looking for additional offices in the District. CresaPartners' Stein says Davis Polk & Wardwell; Baker, Donelson, Bearman, Caldwell & Berkowitz; Perkins Coie; and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo are among them, and all have Washington leases expiring next year.

Perkins Coie's DC managing partner, John Devaney, and Baker Donelson's Washington office head, John Calender, both say their firms have toured some of the built-out spaces resulting from last year's firm mergers and dissolutions. They agree that such options can be attractive, but the downside is that a new tenant loses the ability to customize the space.

But there's no disputing that built-out offices can be a bargain compared to brand-new space. In December, Hunton & Williams signed a 15-year lease for 190,000 square feet at the new Boston Properties-owned building coming up at 2200 Pennsylvania Ave. NW Boston Properties' Storr says the remaining office space there is going for close to $90 per square foot.

It's a hefty sum, especially in a tough market. And unlike Thelen's old space, the offices don't come with the art on the walls or the leftover stack of letterhead.