Commercial Real Estate Strategies & Insights | SimonCRE

4 Misconceptions of Build to Suits

Written by simoncre | Oct 15, 2019 2:13:56 PM

When a company decides it’s time to open another location, it’s not always a “one size fits all” solution that is the most ideal. In an especially tight or seller’s market, pursuing a single-tenant build to suit development may be the attractive answer.

However, if you’ve ever heard rumors such as owners lose all control in a build to suit, you may have an incorrect picture painted in your mind with misconceptions surrounding the topic.

So, before shying away from a new opportunity that may seem to have an irreparable “cons” list, see below for ways to turn lemons into lemonade, so to speak. 

Misconception

Reality

1. It’s overpriced and therefore, almost impossible to have your credit approved.

 

  • Maintaining great credit is not just a smart business practice, but will also pay off and make more economic sense in the long run.

2. This type of development calls for a long-term commitment that most businesses don’t want.

 

  • When the company is ready to plan for its long-term needs, it could benefit greatly from a highly customized build in which the developer could hold the burden of risk instead. 

3. The project timeline could take many years of uncontrollable delays and the main decision-maker won’t be the owner anymore.

 

  • Contrary to any misunderstandings, owners still maintain control over the development and if you’re able to allot the time and patience, the reward is a fully customized new space, tailored specifically to your vision and growth plan.   

4. Build to suits are not for everyone and not for every time during a company’s life cycle.

 

  • What may not seem like the right time, may just be a lack of the right resources and perspective of the big picture, so be sure to research plenty of items on the topic of build to suits.


As mentioned, what may seem to be the pitfalls associated with build to suit opportunities may not even be detrimental to your business. Also, remember that a development company can greatly help facilitate between the landlord and tenant to construct a successful build to suit that hits all the requirements the first time around. There are many advantages of hiring a developer, including the fact that they will acquire, take ownership, and manage all the risk of the property’s construction. 
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