Headlines about new ways of working have been in the news for quite a few years. The trend in the opportunity for remote working, whether you work for a company large or small, combined with continued growth in small businesses, have fueled the need for change in how we meet the demand for workspace. Here are some statistics on our home state of Minnesota:
In 2018 - 513,118 small businesses exist representing 99.5% of businesses, this according to the U.S. Small Business Administration, Department of Advocacy.
Extrapolating data from a number of sources, Minnesota small businesses employ approximately 47% of the state’s employees.
The State of Minnesota Department of Economic Development provides further statistics that show that 83.7% of these small businesses employ 19 or less individuals.
It’s no wonder that the real estate industry has had to adjust its approach to providing workspace. The entry of coworking space and its continued growth has been just one way of meeting this demand. Spec space is another.
What is spec space?
Located in a typical multi-tenant building, spec space is ideal for smaller tenants that range in size from 1,500 – 5,000 square feet or more. Spec space aims to make the leasing process easy by providing move-in ready space. Spec space is literally plug-and-play with complete build-out in place along with furnishings, wired for immediate use. Some landlords are devoting entire floors to this relatively new concept. In some cases, this strategy has been used to market harder-to-lease spaces.
Many spec space opportunities include shared conference rooms, kitchens or break rooms and reception areas.
Tenants benefit by having an immediate visual of the space as opposed to trying to imagine an unfinished opportunity. They do not need to wait for the tenant improvements to be constructed and have the efficiency of the shared common areas. Most spec space still offer some opportunity for individual company branding.
Is leasing a spec space right for you?
Before deciding if leasing a spec space is the way to go, compare the cost efficiencies between individual tenant build-out vs. spec space. Analyze these costs carefully to determine the differences and weigh them against your list of goals and drivers for your business and your business’s commercial space needs.
The good news is that small businesses have one more option for quality workspace! Work closely with your tenant rep broker to determine what is best for your business. If you are contemplating spec space or need a place to start with evaluating your needs, contact us. We would be happy to help you assess what can work for you.