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Office Market Insight

Austin Q1 2023 Market Stats

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Spec Suites: The Answer to Filling Office Space in a Post-Pandemic World

Many companies are struggling to make important decisions about their office space due to uncertainty about a potential recession and whether employees should work from the office, remotely, or hybrid. Some businesses are downsizing their office footprint or renewing short-term leases, while many are choosing to lease pre-built spec suites.

A spec suite is a newly constructed office space built by a landlord before securing a tenant. This is considered speculative because the landlord is gambling that the size, layout, and design of the spec suite will fit the needs of a future tenant.

The ideal tenant for a spec suite is typically a small to medium-sized company as they may not have the resources or desire to undergo the design and construction process necessary to create a custom-built office space. This allows the company to secure a high-quality space quickly and with minimal hassle. By targeting this market segment, landlords can offer a valuable service while also maximizing their occupancy rates and minimizing their risk.

One important consideration when designing spec suites is the layout. Landlords must ensure that each suite appeals to a wide market by including workrooms, conference rooms, a kitchen, a couple of offices, and some open areas. To attract tenants, landlords typically carve up a larger suite into three or four suites of differing sizes and configurations. This way, when a prospective tenant comes to tour, something will appeal to them.

This has become the go-to strategy now with most landlords here in Austin. By offering move-in ready spaces with modern design and amenities, landlords can attract and retain tenants more quickly. As Austin continues to grow as a hub for startups and small businesses, spec suites are likely to remain a valuable tool for office landlords looking to stay competitive and meet the evolving needs of their tenants.

*This blog post was produced by utilizing ChatGPT

Austin Sublease Activity

Quarter Class A Office Class B Office Class C Office Total
2018 Q1 1114427 465834 22831 1603092
2018 Q2 1135173 703671 27356 1866200
2018 Q3 1158644 596011 62841 1817496
2018 Q4 1025760 685090 51813 1762663
2019 Q1 959386 616030 32816 1608232
2019 Q2 907874 659263 19732 1586869
2019 Q3 641646 632070 27772 1301488
2019 Q4 943674 657355 20145 1621174
2020 Q1 1293038 699123 20254 2012415
2020 Q2 1912374 808228 35809 2756411
2020 Q3 2295295 946767 44659 3286721
2020 Q4 3024439 1070789 48013 4143241
2021 Q1 2905258 1016242 59778 3985265
2021 Q2 2067050 823289 51786 2942421
2021 Q3 1760065 731252 38713 2530284
2021 Q4 1889479 845798 45870 2781147
2022 Q1 1468352 909732 51755 2429840
2022 Q2 1905530 888513 30219 2824263
2022 Q3 2536072 1265781 28336 3829191
2022 Q4 3331840 1437075 32726 4812712
2023 Q1 3898586 1450787 39880 5389254

Austin In the News

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