As part of its multiyear revitalization of Buckhead’s Piedmont Center, the Ardent Cos. is integrating eight spec suites across its 45-acre campus.
The slate of spec suites — pre-built, “turnkey” spaces that allow tenants to skirt delays usually required in office buildout — is Ardent’s latest venture to integrate flexible office space into Piedmont Center.
It’s also a response to a broader market trend of tenants seeking agile options as pandemic-related uncertainty muddies their immediate needs for space and accommodation. Betting on an improvement in demand for office space in 2022, global real estate research firm CBRE anticipates flexible space adoption will accelerate in the next year.
“The economy continues to grow — our current tenants are growing, outside tenants looking for space sometimes do not have the luxury of time on their side to identify and secure an office location,” said Ardent Cos. Managing Director Mike Guynn.
The key advantage of a spec suite is flexibility. They’re offices for the nimble — less communal than coworking spaces, but structured with the same ability to scale.
The lease execution for a spec suite is typically shorter than a traditional office space, which allows businesses or firms to easily move-in or move-out on tighter timelines. Similarly, lease terms are less rigid — spanning three years instead of five or 10, as an example. CBRE anticipates tenants becoming less hesitant with signing longer-term leasing decisions as office rebounds in 2022, but the shorter leasing option is still an attractor to companies in growth mode.
The added benefit of flexibility doesn’t come for free, however — owners are often inclined to charge premiums for ready-built spec spaces, according to a pre-pandemic study of speculative office spaces by commercial real estate advisory firm Newmark.
Atlanta is not a leading flexible office market. It’s not lacking, however — there is a concentration of coworking spaces within a five-mile radius around Piedmont Center — but its inventory is far lower than that of other Sunbelt cities like San Francisco, Dallas-Fort Worth and Houston.
Embedding flexibility into their offerings became a key part of Ardent’s business model as it began to modernize the property in 2016. It comes with the territory — there’s enough space across the 14-building Piedmont Center campus to grow with tenants as their needs evolve.
Past and current tenants have jumped from space to space as their operations have outpaced expectations from when they signed their initial lease. The idea to add spec suites to their portfolio — a program named Start Spec — partially came out of tenants’ requests for options to expand.
“In the last 12 months, we get more phone calls from people saying we need X amount of square feet for the next six to 12 months or two years, or we just got funding as a new company and we’re ready to expand into a real office space,” Guynn said.
Ardent will spread out the spec suites throughout the 14-building campus, with spaces ranging between 2,200 and 7,000 square feet and varying in design. Asking rents will vary based on the space, and Ardent anticipates delivering the units in January or February of next year.