Triangle Business Journal
By Kayli Thompson
March 12, 2026
Gordon Grubb, president of Grubb Ventures, said he had no idea just how successful the spec office suite program would be at Raleigh Iron Works considering he felt like the company joined the rising trend late.
Before the developer added the spec suites, the office space along Atlantic Avenue was hovering around 60% leased. Six months after launching the spec suites, the office space is 100% leased. No vacancy.
“The momentum that people were seeing and the traffic that we could talk about was spurring people to then sign up for the vacant space,” Grubb said.
“[They could] see what it would look like versus our other spaces that were built out so custom for the tenants, and so the spec suites are more of a design that would be more acceptable to general tenancy.”
For Grubb, building spec office suites for companies that want move-in ready space led to filling remaining vacancies in the building. Clearly, it paid off to deliver 22,000 square feet in five spec suites as companies like Indie Consulting jumped at the chance for a move-in ready office.
This is a trend that other office building owners in the Triangle, such as Kane Realty and Accesso, are also seeing. Office landlords started spec suite programs because they witnessed a shift in the office market that revealed tenants didn’t need as much office space as they did since the rise of remote work.
The rise of remote work has meant companies don’t need as much space as they used to. So users who used to need 25,000 square feet or more are now looking for 20,000 square feet or less.
Add on the fact that several companies didn’t want to deal with the hassle and costs associated with building out a shell space.
Creating a whole or partial floor of spec suites where sizes ranged from 2,500 square feet to 8,000 square feet helped reach corners of the office market not available to them since before the pandemic.
The spec suites phenomenon picked up rapid pace in 2025, and many in the commercial real estate world expect that it will keep trending up.
Attractiveness of spec suites
When Molly Baker, CEO of Indie Consulting, was looking to move her Raleigh team out of a coworking suite to a permanent office, she was open to anything. She spent two years searching for the right size space with amenities in a good location and the right price. Whenever she found something though, the cost of building out the space felt like the “juice wasn’t worth the squeeze.”
Indie Consulting is a marketing consulting firm that has done work for Highwoods Properties, Bartaco, Dove, Cheez-It, Pringles and Optimal Bio.
While Indie Consulting has been in a spec suite at Raleigh Iron Works since January, Baker initially decided against Iron Works because upfitting a shell space seemed “intimidating” and the spec suite program hadn’t been launched yet.
Baker’s interest in spec suites was piqued when Grubb Ventures and Kane Realty both announced programs in their office buildings. She toured North Hills and Raleigh Iron Works, eventually signing a lease in July for a 3,700-square-foot suite for six years.
“I felt like it made it easier to still get what we were looking for, but have some of the basics already in place. … There [are] common amenities, which is something that we were used to coming from the coworking space and enjoyed honestly; there’s a bigger conference room setup if we need it. … There’s different spaces outside where people can sit if you want to get out of the core space,” Baker said.
“It almost was like the most natural next step for us, coming from a suite inside a coworking building where we could interact with other businesses and have common amenities to then now, we have more of our own space, but some shared elements as well, and the actual move-in process was so much more seamless.”
These types of tenants and their need to have a smooth moving process are convincing office building owners to add spec suites to their buildings, especially in new trophy assets that have been struggling to fill vacancies.
Robin Roseberry Anders, executive vice president at Tri Properties, said the trend of spec suites came about as a result of how to get leasing activity to pick up post-Covid. Landlords watched and waited as companies delayed decisions by extending leases for a short time.
Uncertainty in the office market created companies who were hesitant to move to a new space for a long-term lease and that required time and money to upfit. Signing on for spec space can typically mean being able to opt-in for shorter lease terms as landlords look for at least seven to 10 years when it comes to regular office space.
“The landlord is going to get X amount. Because of where construction costs are, the actual build out costs well in excess of that,” said Ryan Gaylord, executive vice president of corporate services for Tri Properties.
“So for particularly smaller users, where there’s not a lot of economy to scale on 5,000 square feet or less, the dollar doesn’t stretch very far. So you were having deals that were getting caught in sort of logjams, and they wouldn’t go anywhere. We had a few of those clients that deals just stalled and just went silent.”
Gaylord added that tenants often have a “lack of vision” when it comes to touring empty spaces that need finishing.
“When … you get rid of the weird colors, or the old carpet, or things that need repair, or whatever is weird, then a tenant can walk in and not be caught up in, ‘Wow, it doesn’t look like that was maintained’ or the problem, or what it was going to cost to fix that,” Anders said.
“Instead, they’re walking in and saying, ‘Oh, I think my employees would really like that. That can be my office, and this is a great break room,’ so they’re seeing themselves in it. When you only have maybe 10 or 15 minutes for a showing, you have a very short window to make an impression with a prospective tenant. You definitely don’t want them to focus on what’s wrong with it. You want them to focus on what’s right about it.”
So not only have spec suites helped building owners sign companies who need less space, but also it has helped lease up vacancy in the rest of the building as potential tenants see what could be possible in the unfinished space.
Impact on office vacancy
Kane Realty Corp. has experienced this phenomenon with its One North Hills office building overlooking Interstate 440. The 264,000-square-foot building opened in mid-2024, added a full floor of spec suites in late 2024 and by January 2026, all of the office space was leased.
The nine spec suites were all spoken for by July 2025, less than a year after delivering the suites. At the time, the office space in the building was only 41.5% leased.
The same has occurred at Raleigh Iron Works for owners Grubb Ventures and Jamestown. The spec suite program was announced in early 2025 with suites open and ready for new tenants in August the same year.
When the program was announced, the overall office space was about 60% leased.
In January, DraftKings signed on for the last remaining shell office space at Raleigh Iron Works, which is now 100% occupied on the office side. It hit full occupancy less than a year after creating spec suites.
“We were very pleasantly surprised at just how quickly it leased and how it helped us lease up the other vacancy,” Grubb said.
While tenants don’t have to pay for the cost of construction and labor, the landlords build that cost into the rental rate. But because the space is smaller and is in a highly amenitized building, it ends up either being comparable to what the company was in before (even if downs sizing) and/or is worth it because of all the amenities available to its employees.
The cost to completely build out spec space isn’t significantly more than shell space for larger tenants. Gaylord said the owner takes on a heavy expense in the beginning but spreads it out across an entire floor and is able to get it turned around and having tenants moving in and paying rent in four months or less.
“Generally it’s about even [cost to build spec], maybe a little bit more for a spec suite, because we generally want to make a very nice product that shows very well, but tenants in general right now want to have a really nice space that shows well and helps them to recruit and retain top talent. So costs everywhere are high. It depends on the condition of the space before we start fitting it up,” said Alex Romero, managing director of investments at Accesso.
While tenants for shell spaces take on the costs for upfitting, the process for moving in is much longer, taking up to as long as eight months. That’s eight months the landlord is paying rent on the space rather than collecting rent.
Florida-based Accesso is getting ready to deliver 18,000 square feet of spec space in the 555 Mangum office building in Downtown Durham. There will be five suites that will be ready for tenants to move-in in June. The real estate firm acquired the 242,063-square-foot building in October 2025.
In second quarter 2025, the building was about 65% leased, per Triangle Business Journal Space data. Since Accesso acquired the building and announced the spec suite program, the building is 80% leased. Thirty-five percent of the available space is the under-construction spec suites.
Romero noted that this is a national trend the company is seeing across all its markets. Accesso owns more than 18 million square feet of commercial real estate across North Carolina, Florida and Texas.
“As construction costs increased from 2019 till now and construction timelines have gotten slower in many of our markets, we’ve seen the push for and desire for ready build spaces that tenants can plug and play and move into. That is a trend that we’re seeing everywhere,” Romero said.
The ripple effect on the office market
While the rise of remote work shifted the office market in such a way that it demanded spec office suites, the rise of spec suites has started shifting the office market in new ways. One of those ways is being able to retain growing companies.
Indie Consulting started with a team of five at Industrious in 2019. At its new office in Raleigh Iron Works, it has 17 employees and another eight in a New York City office. Baker said the team is growing rapidly, which is part of the reason for the move as she felt like “people were sitting on top of each other.”
Baker said the suite at Iron Works can accommodate 30 people, a target she plans to reach in the next few years. She added that Grubb Ventures provided the company with options to renew and to expand into a larger space if the company grew faster than anticipated and needed even more room.
“If you can get the tenant in your building and then their employees are used to high-end quality … they don’t want to move to something else that they have to pay for. .. So if you can get them in the building and then you can expand them in the building down the road,” Anders said.
“Let’s just say they go in and they do five years. Well, once they get in and they’ve got this great face and this image, and this is now the company culture … everybody’s moving up. Everybody wants to move up. So (a) they’re going with a trophy; (b) they’re going to A.”
Another way spec office suites have transformed the market is the trickle of what types of buildings add spec office space.
It started in trophy and Class A buildings that were new and needed to fill up vacancy. As those assets lease up and don’t need to add spec space, the Class B market will respond by adding spec suites.
Some owners of Class B have already done just that. Durhamite, owned by Jonathan Dayan and Eyal Reggev, bought two Class B buildings in Durham with millions of dollars in planned upgrades.
One of those upgrades was turning the entire third floor of the SouthCourt office building into spec suites ranging from 689 square feet to 2,363 square feet. When Durhamite bought the SouthCourt building in February 2025, it was 38% leased. The building is now 66% leased, per LoopNet.
Grubb said the market will continue to see this trickle as space fills up in each higher class and owners of Class B and Class C office buildings will add spec space to assist in filling their vacancies.
“The need for developers or owners to do spec suites in Class A space is probably winding down, because they’re likely leasing their buildings up, and we don’t see any new Class A construction in the market,” Grubb said.
“It’s probably going to be trending up on the Class B, particularly well-located Class B space, because now the activity is starting to shift there. … It’s trending down in Class A and trending up in Class B.”