Big Buildings Blog Post October 29, 2019
From: Coldwell Banker Blog 15 Aug 2019
In today’s environment, many markets are experiencing rising downtown office vacancy coupled with changing tenant preferences and demands. As such, landlords and building owners are having to think outside the box when it comes to strategies they can implement to help fill space and keep their buildings occupied.
Savvy, forward-thinking owners are turning more and more to building out spec suites, or office space that is built ready to have tenants move in – before anyone ever signs a lease. And while spec suites are nothing new, the ways in which they are being built and marketed are definitely changing right before our eyes.
Historically, spec suites were built out to 5,000 square feet or less and, more often than not, occupied small and unoccupied sections of otherwise occupied floors. However, it is becoming more common to see spec spaces that are between 10,000 and 20,000 square feet. As an added bonus, in addition to helping people see the true potential in a space, these types of spaces allow tenants to move in immediately and often also offer shorter lease terms. In fact, some of these leases allow tenants to commit fewer than 5 years to the commercial space – an option not often offered for these types of listings.
While construction of these types of spec suites has recently just begun, meaning that we don’t have much historical data on how they perform overall, industry experts and insiders predict that the concept will work. This prediction is due, in large part, to commercial tenants who don’t love signing onto long term leases – especially if they’re in a growth phase. Short lease terms, in a space that has already been built out, allows tenants to move in immediately, make some design tweaks to really make the space their own, and then move on or expand, when necessary, as they continue to grow the company.
But how does this apply to marketing? In what ways will spec suites change the way we market commercial real estate space? Today, the spec suite is evolving and changing to meet market demands. In addition to offering turnkey space for commercial tenants, spec suites can also act as a form of a marketing suite. Think of this concept as being similar to a model home, a new and shiny modern and high tech space designed to help get people through the door and get them excited about the building – and then sign on the bottom line of a lease.
One of the things that spec suites do well is engage with people on an emotional level. Often times, people are viewing multiple spaces in the same day – and they tend to shut down emotionally after the first few spaces they see that all look the same. For these clients in particular, walking into a thoughtfully designed space will really make the spec suite stand out from the others.
Of course, from a marketing standpoint, it’s also important to consider the other end of the spectrum. If your spec space is infused with too much individuality and personality, it can actually be a turn off for potential tenants. Flexibility is key in space design – and the experts agree. Think about it – let’s say you design the space with a particular color scheme throughout the suite. What happens if the new tenants move in and their branding is the complete opposite? It’s important to make sure that those particular design elements are easy to switch out.
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