The 'Amazon Effect' Is Creating Instant Demand For Office Space

Building out move-in-ready spec suites is gaining popularity, especially among new owners of office properties looking to boost occupancy.

But those spec suites are almost never big enough to house a 20K SF tenant, and that’s where the problem comes in. Chris Lewis, co-managing principal at Lee & Associates-Houston, said he’s seeing tenants touring 20K SF spaces and wanting to move in within a month. 

These tenants are seemingly primed by online shopping, where they can get their products delivered within a day or two, which is why Lewis is calling it “the Amazon Effect,” he said at a press briefing at Lee & Associates’ Houston office on Tuesday. 

“I think that’s highly irresponsible, to be honest, from a business owner, but that’s what’s happening,” Lewis said. “The mentality of the user today is instant gratification.” 

The average tenant takes about 3,800 SF today, down from about 6,000 SF pre-Covid. Tenants from 1,500 SF to 7,000 SF can often find spec suite options, depending on the submarket.

Bigger tenants searching for move-in-ready space may not find a spec suite to fit their needs, but they could actually provide a boost to the lower-tier office buildings in Houston’s bifurcated market.

To find a 20K SF tenant office space within a month, brokers would usually first check listings to see whether sublease space is available in a Class-A building or how quickly a comparable building can get a space ready, Lewis said. 

If those options fail, the tenant might consider a Class-B office, if it can be ready in their required time frame, he said.

Even if tenants don’t need office space move-in ready, they are still moving more quickly than some brokers might be accustomed to. Many of today’s decision-makers are young and technologically advanced, so they want immediate responses, said Bill Insull, a landlord rep and principal at Lee & Associates. 

If a broker waits 24 hours to return a phone call, they might find that a decision has been made and they missed it. 

“The speed and breadth with which you communicate with these tenants is the key to succeeding,” Insull said.

What has remained constant since the onset of the pandemic is demand for high-quality office space. About 20% of today’s expiring leases were executed before Covid, so tenants are still rightsizing, Lewis said.

They may shrink from 20K SF to 10K SF but move to a building with a highly amenitized, walkable environment and a higher-per-square-foot rent. 

“They’re halving their size and paying the same amount of rent in a better-quality asset,” Lewis said.

Despite this trend and negative absorption in the first quarter, Houston saw positive absorption for the full year of 2025, the market's first annual gain since 2019.