How do build to suits work?
A Build to Suit (BTS) is where a commercial property tenant enters into an agreement with a developer or landowner to construct a new, custom-built facility for lease. Once completed, the tenant typically becomes the sole occupant.
What is a build to suit transaction?
In a build-to-suit transaction, W. P. Carey funds the construction of a new facility or the expansion of an existing one to meet the specifications of a prospective or existing tenant. Upon completion, the tenant enters into a long-term net lease, while retaining full operational control of the custom-built facility.
What does build to suit commercial mean?
A build to suit is a commercial building or space specifically constructed to the client’s needs – whether that’s an indoor trampoline park, home of a tech company or a simple update of space – this process focuses on one end user.
What is build Suit accounting?
A build-to-suit lease is a contractual arrangement that requires the developer to construct an asset based on the lessee’s specifications that the lessee will lease when construction is complete. The developer finances the construction, retains ownership, and then leases the asset to the lessee at completion.
How does a build to suit differ from a sale leaseback?
A build to suit is a commercial building specifically constructed to meet the design and physical specifications of one particular user. Sale-leaseback: In this process, a tenant will acquire the land, assume the liability of financing, and hire a general contractor to plan and construct the building.
What is BTS construction?
Built-to-suit is a way of leasing commercial property whereas the developer/owner has constructed a building to the specifications of a particular tenant or type of tenant.
What does design/build means?
Design-build is a method of project delivery in which one entity – the design-build team – works under a single contract with the project owner to provide design and construction services. One entity, one contract, one unified flow of work from initial concept through completion.
Why is design and build better?
Design and build provides a high-quality finish with an efficient delivery. Another benefit of design and build is that it de-risks the procurement process for clients at a time when financial caution is crucial. D&B delivers 100% cost certainty as the client and contractor share the risk.