Tenants Love Prebuilt Office Suites. Landlords Are Sick Of Them

D.C. office owners in the postpandemic era have built out a slew of spec suites — designed and furnished spaces that allow tenants to move in quickly and offer flexibility on lease terms.

The concept has historically been somewhat of a win-win. Along with those benefits to tenants, landlords have been able to save on tenant improvement allowances, use slow periods to prepare for future demand, and position the suites as a competitive advantage.

But in an environment of high construction costs, paired with the glut of spec suite supply, landlords say they have become more of a drag on their bottom lines.

The problem: They’re popular...

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RSK: Hmmm, prebuilt out suites are usually a tough sell because tenant wants something changed. Plus, you have to carry that debt of building out until it is leased.