Will we see specs again?

• Position: Speculative real estate - Commercial Real Estate

Ask Indiana brokers, and you'll see little expectation for spec building. At least one Indiana business, however, is taking a look at specs: PSI Energy Inc.

With a $3 million annual economic-development budget and a team that provides everything from community resumes to topography maps, PSI is serious about furthering business activity in the state, Rick Burger says. Based in Lafayette, he's a PSI economic-development representative for a multicounty area.

"I think communities are looking at spec buildings again. Buildings can and have sat vacant, but they also can be a drawing card," he says, acknowledging that industrial sites fare better than others.

"PSI is looking at being a partner with communities in putting spec buildings up," he says. Next year, PSI plans to select one or two spots for closer evaluation.

It's a trend that's begun elsewhere, he says. Both Georgia Power & Light and Louisiana Power & Light are involved in specs.

Any involvement in a spec is most likely to be industrial, says Robin Saddler of PSI's Indianapolis office.

Specs may indeed reappear, but the conditions have to be right, says Mike McKenna of Indianapolis' CB Commercial. "When vacancy rates drop below 10 percent for a couple of quarters, you might see a spec go up. Lenders are hesitant."

"Pure spec real-estate business, if it is not non-existent now, is soon to be," predicts Jim Lohman...