Law firm narrowing search for new home.

Two broken deals may add up to a signed lease for Goodwin Proctor, the law firm that has struggled in recent months to find a space in which to relocate from its current space at 599 Lexington Avenue.

After Goodwin Procter had a 238,000 s/f deal it was negotiating at 1095 Avenue of the Americas collapse when ownership of the building changed hands, rumors permeated that the law firm would end up instead at The New York Times building, where The New York Times is offering 150,000 s/f of its space for lease.

Now, insiders with knowledge of Goodwin Procter's search for space say that the building is but an option, albeit a strong one, among a handful of big blocks of space on the market that the firm is considering--a shortlist that brokers say features prominently a competing availability at 340 Madison Avenue.

That opening was itself created when a seemingly sure deal fell through. PricewaterhouseCoopers had been negotiating with 340 Madison Avenue's new landlord, Broadway Partners, to take most if not all of a 300,000 s/f block in the recently renovated property, which sits just two blocks away from PWC's corporate headquarters at 300 Madison Avenue. Rents on that rumored deal were said to be in the $80s per s/f, a rate far lower than what tenants pay for midtown's most expensive square footage, but above what some sources indicated the space would command.

Goodwin Procter's potential deal at the New York Times building left some brokers puzzled as well, even though the building, which was developed by a partnership between The New York Times and Forest City Rather, has been a magnet for law firms.

After posting disappointing earnings in recent months, The Times has been eager to lease some of its space in order to take advantage of the meteoric rise of Manhattan office rents. But unlike the portion of the building owned by Forest City Ratner where a number of law firms have settled, The Times' space come with raised floors, a platform structure built to allow space between it and the actual floor in which to run the various power and data cables the paper planned to install to support its operation. Such raised floors are considered unattractive to tenants who don't need them.

But the deal in the building may not be done yet. Brokers still call it a front-runner among the firm's options and in recent weeks, Goodwin Procter expanded its negotiations to take some of Forest City Ratner's space as well in a deal that would give it contiguous 200,000 s/f groups of floors--50,000 s/ f more than what it was originally in talks for.

While the fickle winds of big space leasing blow unpredictably in other parts of the city, brokers are reporting that Lehman Brothers just completed a massive 400,000 s/f deal at 1271 Avenue of the Americas. The space was being offered for sublease by Time Inc. for a relatively modest rent in the $70s per s/f. The deal's economic potential was limited by the fact that Time Inc.'s term expired in ten years, a relatively short period for a lease so large.

The time frame of the deal may play into a larger real estate strategy that Lehman Brothers is arranging. Speculation abounds that the financial giant took the space at 1271 Avenue of the Americas as a temporary home for its expanding operations while it waits for a new office tower on the site the Pennsylvania Hotel, a development that is being planned by the hotel's owner Vornado Realty Trust.

A CB Richard Ellis team led by the firm's New York co-chairman, Robert Alexander, is representing Lehman in its lease at 1271 Avenue of the Americas. Studley represents the sublessor Time Inc. Real Estate Weekly first reported the deal in its December 13, 2006 issue.

AIG is said to be close to inking a deal for 150,000 s/f at 277 Park Avenue. The space, located on floors 41-47, is being offered for sublease by JP Morgan Chase with rents that start at $100 per s/f and a term that extends past 2020. CB Richard Ellis senior vice president Lewis Miller represented AIG in the deal. CBRE vice chairman John Nugent represented JP Morgan Chase.

JP Morgan Chase's space also included the 48th floor, but that space has just been leased by the hedge fund DiMaio Ahmad Capital LLC, which relocated from the 44th floor of 245 Park Avenue.