Over the past year, there has been a rise in the CRE industry for owners to invest in building out speculative suites, or more commonly referred to as a spec suite. Here at Dowling Construction, we are first-handedly contributing to this trend as one project team—Glenn Fricke, Project Manager and Shelby Giese, Project Coordinator—begin work on their third spec suite of the summer. So, why is it that building owners are using their resources for a tenant that has yet to sign a lease?
One reason owners are embarking on the spec suite route is that help boost leasing activity. A spec suite is a happy medium between a shell-space and an office that is overly designed. Prospective tenants are enticed by these types of spaces because they’re a tangible option; a tenant can envision their business operating here, they can picture where the furniture will go, and can physically see how much usable square feet is available. The framed reception area, popular glass-enclosed conference room and upgraded finishes attract tenants, while the quick occupancy appeals to the owner.
Another reason owners have been gravitating towards spec suites is money: owners can control costs. Think of a spec suite as a “pre-fab”, flexible space which eliminates the need for a tenant improvement allowance or space planner. The owner’s goal of building a spec suite is to minimize the amount of modifications a tenant would like to make, therefore saving the owner money. Furthermore, a finished suite will allow the tenant to move in immediately after signing a contract, decreasing the amount of time a suite sits vacant. Spec suites are a win-win for both parties; the tenant can set up shop right away, while the owner can start collecting rent.
Below are three types of spec suites that Dowling Construction has built-out recently. Check back soon to see photos of the each type of completed spec suite.
Option #1 – “White Box”
- Large, open, blank space
- New white paint & new floor
- Upgraded LED lighting
- New grid & t-bar ceiling
- Ready for a tenant to move in and add cubicles, any necessary offices, or a kitchen if required
Option #2 – “Polished- Raw Space”
- Partial, open space (usually offices along exterior of suite with large open common areas)
- Includes conference room
- Neutral paint and polished concrete (the tenant can decide what finishes to install)
Option #3 – “Turn-key/designed”
- Includes an IT room, conference room and kitchen
- New, modern finishes
- Neutral paint with 1-2 accent walls
- A few offices plus a large open space