The Rise of the Spec Suite: Why Many Tenants are Considering Move-In Ready Options for their Next Move
Among all the shifts in commercial real estate since 2020, a handful of trends have emerged as key indicators of the future of the market. Tenants’ flight to quality is perhaps the most striking pattern we’ve seen, with Class A space in remarkably high demand across all industries and neighborhoods. As such, it’s not surprising that we’ve seen tenants increasingly drawn to spec suites for their workplace needs. Spec suites offer flexibility and quality with minimal heavy lifting for occupiers, and they are a great alternative to the high cost of construction.
What are Spec Suites? And What is All the Buzz About?
Speculative suites – commonly known as ‘spec suites’ – are spaces within multi-tenant buildings that landlords develop to move-in readiness before having a tenant committed to the space. Landlords then put these spaces on the market and potential occupiers can immediately see the full, built-out space without having to engage a design team or consider construction prices and timelines.
For tenants looking for a fast and painless solution for their real estate needs, spec suites are a particularly attractive option. The spaces are typically at or near move-in readiness and require minimal improvements. Without the lead time of construction, spec suites give occupiers an added degree of flexibility when making their real estate decisions. As a bonus, spec suites are often newly renovated and offer a modern, fresh workspace for occupiers looking for quality.
Spec suites can be beneficial to both landlords and tenants. With skyrocketing construction prices, all parties are looking for options to avoid significant space interventions. In addition, spec suites eliminate the ‘unknown’ factor for both landlords and tenants, so everybody has a clear idea of the space and its use options when finalizing a lease agreement.
Key Considerations for Occupiers
If you’re looking into spec suites for your next real estate move, there are a few important details to consider. In most cases, these solutions are best suited to small and mid-sized tenants that don’t require a heavily customized or branded workplace. Look closely at the layout and communal areas to be sure the space will meet your team’s needs and vision. Spec suites landlords are not always willing to provide additional tenant improvements dollars as they’ve already invested in the space.Spec suites are a great option for organizations in many different industries, especially growing companies looking for a shorter lease term in case they outgrow the space. To develop a real estate strategy tailored to your needs and understand your best options in the market, reach out to our team of Transaction Advisory experts.