Understanding Spec Suites in Office Leasing

What Are Spec Suites and How Do They Benefit Office Users?

Spec suites have become more common in the Minneapolis – St. Paul market and beyond in recent years. Landlords are trying to stay competitive by offering fully furnished offices for shorter lease terms to compete with the rise in coworking space and rising construction costs. Spec suites provide a unique opportunity for businesses that may be seeking a less conventional leasing experience.

What Are Spec Suites?

A spec suite (short for speculative space) is an office space that has already been built out by the landlord. They are typically suites within a multi-tenanted building where the landlord has preemptively invested in making the space move-in ready or near move-in ready without necessarily having a business lined up to occupy the space.

Spec suites can range in size based on the building and the market. In the Minneapolis – St. Paul office market, spec suites range from 1,000 SF to 10,000 SF.

Benefits of Spec Suites

A key benefit of leasing a spec suite is that it minimizes the out-of-pocket costs for construction and finishes. Furniture and construction prices have been consistently on the rise, making new office build-out very expensive. Spec suites typically come furnished and move-in ready, so the tenant can enjoy new, high-quality furnishes without having to pay for them out of pocket.

Spec suites can be a great option for businesses that need to be in their new office quickly. The average timeline for a new office build-out can range anywhere from 2-8 months, depending on the level of construction needed. Spec suites can significantly reduce the time between lease execution and moving in.

Spec suites are also a good option for businesses looking for newly furbished space but don’t want to commit to a long lease term. Because the landlord has already paid for the construction, they may be more willing to consider a shorter lease term.

Disadvantages of Spec Suites

Businesses looking at spec suites can expect to see higher rates than what they might see for 2nd generation or shell space in a building. The landlord’s investment in the space will often be baked into a higher rental rate.

Another disadvantage of spec suites is a relative lack of control over the look and feel of the space. If a tenant commits to the spec suite early enough in the construction period, they may be allowed to give input into the layout or design elements of the space. But ultimately, the Landlord has the final say in the design and finishes put into the spec suite.

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When working with a Tenant Representation broker, you should be made aware of all the leasing options made available to you.

If you have any questions about spec suites or deciding if a spec suite may be a good fit for your business, reach out to one of the agents at Rokos Advisors to talk through your options.

Rokos Advisors is an award-winning Minneapolis – St. Paul-based commercial real estate/tenant representation firm

specializing in helping business owners find the perfect office or industrial space for their company.