For business owners trying to find the ideal property for their company, a build to suit (BTS) option may be the perfect fit. A build to suit property is constructed to meet the company’s physical specifications and it is built at the location the business owner has chosen. Meeting physical specifications and location choices can be impossible when utilizing traditional real estate, and business owners often have to sacrifice one over the other. With BTS, there is no sacrifice.
A build to suit lease is a perfect choice for business owners who do not want to tie up capital and assets in a huge mortgage in order to purchase land and build. There are many investors who don’t feel comfortable putting their money in high-risk or unstable ventures and are instead looking for solid and safe investments. Build to suit lease properties offer that stability.
How Do Build to Suit Properties Work?
With a build to suit lease property, the tenant (business owner) chooses the design and location of the building they want. A net lease company matches investors and tenants. Once the property is built, the tenant is responsible for rent, as well as the taxes, utilities, insurance, and repairs the building requires. There may also be other operating expenses the tenant is responsible for, depending on the lease agreement worked out between the two parties.
There are several factors that may need to be negotiated in a BTS agreement. Investors will want to ensure the creditworthiness of the tenant, as well as to investigate what the long-term business forecast is for the tenant’s particular business. Conversely, a tenant will want to ensure that the investor has the assets to build, as well as to cover all the costs the net lease agreement stipulates they are committed to. This is where utilizing the services of skilled net lease company benefits both the tenant and the investor.
Both parties may also work together in choosing architects, engineers, and contractors for the construction of the property. Although the property is built to suit the tenant’s needs, the investor may have some input in the design in order to make sure that the property would be attractive to another tenant upon the expiration of the net lease agreement. Keep in mind, however, that these leases are usually long-term. This typically enables the investor to recoup their investment over the course of the lease.
Is a BTS Property Right for You?
If you are a business owner seeking a location for your company – whether you are a new company just opening its doors or an expanding one looking for a bigger location – a BTS may just be the solution you need.
At Calkain, we’ve been matching up tenants and investors for more than a decade and we can work to find the best solution for your company. To find out more information about build to suit, call us today at (703) 787-4714 or fill out the contact form on our website.Build To Suit