The office market is increasingly split between winners and losers. While overall vacancy remains elevated, the best Class A buildings are outperforming, with lower vacancy and rents that in some cases exceed pre-pandemic levels as tenants continue migrating toward higher-quality space.

To compete in this environment, many landlords are turning to spec suites—pre-built office layouts that show prospective tenants what a space could look like without locking in costly, tenant-specific features. The idea is to create a finished, attractive environment that sparks imagination while still leaving room for customization.

When done well, spec suites give landlords a major leasing advantage. They shorten move-in timelines, help tenants visualize how the office will function, and signal that the building understands modern workplace design—an increasingly important differentiator in a market where the best space is getting leased while everything else struggles.

CoStar Group is pushing back against criticism that it has made the performance of Homes.com harder for investors to track. The dispute stems from concerns raised by hedge fund D. E. Shaw & Co. after the company changed how it reports financial segments. In comments provided to Propmodo, a CoStar spokesperson said the claims are “misleading” and defended the company’s decision to reorganize its reporting structure.

The controversy began after CoStar shifted from geography-based reporting to a structure organized around product portfolios. The new format separates the company’s residential and commercial businesses rather than breaking results out by region. Critics argued that the change makes it harder to isolate Homes.com’s financial performance at a time when CoStar is spending heavily to challenge listing portals like Zillow and Redfin. But CoStar says the premise of that criticism is flawed. “Contrary to D. E. Shaw’s misleading claims, CoStar Group has never reported Homes.com results as a separate segment,” a company spokesperson told Propmodo.

The company also argued that the revised reporting structure actually provides more information about its business. “Our new segment disclosure actually offers more transparency by providing audited revenue, EBITDA, Adjusted EBITDA and margin disclosures for both the Residential and Commercial segments in our recent 10-K,” the spokesperson said, adding that investors should expect the same type of Homes.com updates the company has historically provided during earnings calls.

CoStar’s response also questioned the motives of its critic. A spokesperson said public filings show D. E. Shaw owns only about 0.22 percent of CoStar’s stock while holding larger positions in competitors that could benefit if the company scaled back its Homes.com push. “If D. E. Shaw is worried about transparency, it should start with itself,” the spokesperson said. “Public filings suggest D. E. Shaw owns just 0.22% of CoStar Group’s common stock, but almost four times that value in competitors that would benefit if CoStar abandoned Homes.com.”

Demand for the largest warehouses in the U.S. is rising again after several years of slower leasing. Companies signed 146 leases for warehouses larger than 500,000 square feet last year, a jump of more than 30 percent from the year before, according to data cited in a recent logistics report. Tenants, including logistics firms, manufacturers, and companies tied to the data center supply chain, are once again looking for massive distribution facilities after a period when many occupiers paused expansion.

The rebound follows a sharp cooling in the industrial real estate market after the pandemic-era boom. Between 2022 and 2024, developers delivered an enormous wave of new warehouse space, which pushed vacancy rates higher and made tenants more cautious about signing new leases. Some companies also spent several years working through excess inventory that had been stockpiled during supply chain disruptions. As that inventory has normalized and construction activity has slowed, demand is beginning to catch up with supply again.

Another reason the largest facilities are seeing renewed interest is the changing structure of supply chains. Many logistics networks now rely on large regional hubs that feed smaller last mile distribution centers closer to consumers. Third-party logistics companies, manufacturers reshoring production, and companies tied to data center construction are all looking for large footprints that can support automation and high throughput operations. These buildings are expensive to develop but they are increasingly central to how modern logistics networks operate.

The return of demand for big box facilities is a reminder that industrial real estate cycles tend to move quickly. Just a year ago, many investors worried the sector had been overbuilt. Now, the slowdown in new construction and the return of large tenants are starting to tighten the market again. If leasing continues at this pace, the industrial sector may move from a brief period of oversupply back toward the constrained conditions that defined much of the last decade.

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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