---
title: "Single Tenant Build to Suit Development: With vs. Without a Developer"
description: Let’s take a look at a few critical questions you might want to ask yourself before you make a decision to handle your own development or hire help.
image: https://blog.simoncre.com/hubfs/Blog%20Files/Blog%20-%20Stock%20Photos/ST-BTS-Developer.jpg
---
- [Properties](https://simoncre.com/properties/#!/main)
- About Us
- [Our Company](https://simoncre.com/about-us/)
- [Our Team](https://simoncre.com/our-team/)
- [Our Culture](https://simoncre.com/our-culture/)
- [Careers](https://simoncre.com/careers/)
- Approach
- [Development](https://simoncre.com/development/)
- [Acquisitions](https://simoncre.com/acquisitions/)
- [Dispositions](https://simoncre.com/dispositions/)
- Resources
- [Insights](https://blog.simoncre.com/insights)
- [News](https://blog.simoncre.com/news)
- [Case Studies](https://blog.simoncre.com/case-studies)
- [Contact](https://simoncre.com/contact-us/)
- [Properties](https://simoncre.com/properties/#!/main)
- About Us
- [Our Company](https://simoncre.com/about-us/)
- [Our Team](https://simoncre.com/our-team/)
- [Our Culture](https://simoncre.com/our-culture/)
- [Careers](https://simoncre.com/careers/)
- Approach
- [Development](https://simoncre.com/development/)
- [Acquisitions](https://simoncre.com/acquisitions/)
- [Dispositions](https://simoncre.com/dispositions/)
- Resources
- [Insights](https://blog.simoncre.com/insights)
- [News](https://blog.simoncre.com/news)
- [Case Studies](https://blog.simoncre.com/case-studies)
- [Contact](https://simoncre.com/contact-us/)
SUBSCRIBE
- [](https://www.facebook.com/SimonCommercialRealEstate)
- [](https://twitter.com/simon_cre)
- [](https://www.linkedin.com/company/simoncre)
- [](https://instagram.com/simon.cre)
# Insights
 News & views of the industry we love
[](https://blog.simoncre.com/insights/single-tenant-bts-development-with-vs.-without-a-developer#down)
[ back to resources](https://blog.simoncre.com/insights)
This is a search field with an auto-suggest feature attached.
- There are no suggestions because the search field is empty.
CATEGORIES
- [- Buyers](https://blog.simoncre.com/insights/topic/buyer)
- [- Tenants](https://blog.simoncre.com/insights/topic/tenants)
- [- Brokers](https://blog.simoncre.com/insights/topic/broker)
- [- Sellers](https://blog.simoncre.com/insights/topic/seller)
# Single Tenant Build to Suit Development: With vs. Without a Developer
January 14, 2020 [](http://www.facebook.com/share.php?u=https%3A%2F%2Fblog.simoncre.com%2Finsights%2Fsingle-tenant-bts-development-with-vs.-without-a-developer%3Futm_medium%3Dsocial%26utm_source%3Dfacebook) [](http://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fblog.simoncre.com%2Finsights%2Fsingle-tenant-bts-development-with-vs.-without-a-developer%3Futm_medium%3Dsocial%26utm_source%3Dlinkedin) [](https://twitter.com/intent/tweet?original_referer=https%3A%2F%2Fblog.simoncre.com%2Finsights%2Fsingle-tenant-bts-development-with-vs.-without-a-developer%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&url=https%3A%2F%2Fblog.simoncre.com%2Finsights%2Fsingle-tenant-bts-development-with-vs.-without-a-developer%3Futm_medium%3Dsocial%26utm_source%3Dtwitter&source=tweetbutton&text=Single%20Tenant%20Build%20to%20Suit%20Development%3A%20With%20vs.%20Without%20a%20Developer)
Single-tenant build to suit development is a very specialized segment of the real estate industry.
There’s no cut-and-dry reason for why one business decides to handle development in-house while another chooses to use a preferred developer.
As a tenant, you have a fair share of pros and cons to consider. But let’s take a look at a few critical questions you might want to ask yourself before you make a decision to handle your own development or hire outside help.
### **How concerned are you about general cost overruns?**
When you get down to the nitty-gritty, project construction can produce a number of [unanticipated expenses](https://blog.simoncre.com/insights/the-unexpected-costs-of-build-to-suit-construction), which can lead to dreaded cost overruns. In fact, [according to a study by KPMG](https://blog.plangrid.com/2019/08/common-causes-of-cost-overruns-in-construction-projects), only 31% of all respondents’ projects came within 10% of their budget in the past 3 years.
From up-front capital to overall construction costs, managing in-house development means opening yourself up to higher costs and greater financial risk. Every change order, delay, and misstep is going to cost money.
If cost overruns are a major concern (which, when are they not?), working with a preferred developer can help alleviate some of those concerns. You, as a tenant, agree to rent and you know your expenses. A developer is responsible for those added risks.
### **What’s the return on investment you’re looking for?**
If you’re a business with a ton of excess cash and want to keep it in the business, you might be willing to accept a 6 to 8% return on investment by developing your own stores.
But if you’re a business opening a lot of stores and getting a 20 to 40% return by leasing it may make more sense to use a preferred developer. This may help you set up your business to grow and take advantage of the market.
Owning and developing your own real estate can be advantageous at times, but can also come with a greater financial burden and smaller returns for companies whose primary focus is not real estate.
Ultimately, it boils down to what your business plan is, what your main priority is, and what the [most cost-effective approach](https://blog.simoncre.com/insights/the-cost-of-hiring-a-preferred-developer-vs-not) is.
### **How much flexibility are you looking for?**
When it comes to developing and owning versus leasing real estate, flexibility is a key factor to consider.
Many single tenant net lease retailers lease because of the flexibility it provides. Leasing gives retailers more liquidity, offers significant tax benefits, and provides [a more streamlined development process](https://blog.simoncre.com/insights/4-reasons-a-preferred-developer-streamlines-your-project) with less internal overhead.
As we touched on previously, it frees up businesses to invest less in real estate and more in their growth and expansion efforts.
When buying and developing property, your capital is tied up for a long period of time, creating potential opportunity costs. For example, the down payment needed to buy the property could be allocated elsewhere in the business, possibly generating a higher return.
---
When it’s all said and done, the decision to develop and own versus working with a developer should be based on your specific business plans and what you value most. Every situation is unique and both options offer significant pros as well as significant cons.
Take the time to figure out what factors are most important to you and how you can set your business up for success.
[Build to Suit](https://blog.simoncre.com/insights/topic/build-to-suit) [Finding a Developer](https://blog.simoncre.com/insights/topic/finding-a-developer) [Commercial Real Estate Development Planning](https://blog.simoncre.com/insights/topic/commercial-real-estate-development-planning) [Tenant](https://blog.simoncre.com/insights/topic/tenant)
### Related Posts
Check out our latest news & views to help keep you informed
April 16, 2024
[The Factors that Determine the Rent Rate of a..](https://blog.simoncre.com/insights/the-factors-that-determine-the-rent-rate-of-a-property) [read more](https://blog.simoncre.com/insights/the-factors-that-determine-the-rent-rate-of-a-property)
March 19, 2024
[Working With Your Landlord to Achieve Expanded..](https://blog.simoncre.com/insights/working-with-your-landlord-to-achieve-expanded-tenant-improvement-allowances) [read more](https://blog.simoncre.com/insights/working-with-your-landlord-to-achieve-expanded-tenant-improvement-allowances)
March 5, 2024
[6 Common Allowances for Tenant Improvements](https://blog.simoncre.com/insights/6-common-allowances-for-tenant-improvements) [read more](https://blog.simoncre.com/insights/6-common-allowances-for-tenant-improvements)
November 7, 2023
[Selling Land to a Commercial Developer](https://blog.simoncre.com/insights/selling-land-to-a-commercial-developer) [read more](https://blog.simoncre.com/insights/selling-land-to-a-commercial-developer)
August 29, 2023
[What We Look for in General Contractors: Part..](https://blog.simoncre.com/insights/what-we-look-for-in-general-contractors-part-ii) [read more](https://blog.simoncre.com/insights/what-we-look-for-in-general-contractors-part-ii)
KEYWORD
- There are no suggestions because the search field is empty.
TENANCY
- [- Buyers](https://blog.simoncre.com/insights/topic/buyer)
- [- Tenants](https://blog.simoncre.com/insights/topic/tenant)
- [- Brokers](https://blog.simoncre.com/insights/topic/broker)
- [- Sellers](https://blog.simoncre.com/insights/topic/seller)
- [- Fans](https://blog.simoncre.com/insights/topic/fan)
TYPE
- [- Article](https://blog.simoncre.com/insights/topic/article)
- [- Download](https://blog.simoncre.com/insights/topic/download)
- [- Video](https://blog.simoncre.com/insights/topic/video)
### BLOG & PROPERTY SIGNUP
Get exclusive content and property updates sent straight to your inbox
Stay up to date with exclusive content, the latest news, and our property updates delivered to your inbox
- ADDRESS 6900 E. 2nd Street
Scottsdale, AZ 85251
- phone
[480-745-1965](tel:4807451965)
[](https://www.facebook.com/SimonCommercialRealEstate) [](https://twitter.com/simon_cre) [](https://www.linkedin.com/company/simoncre) [](https://www.youtube.com/channel/UCBONc-W0e61QtbfGsW_duPw)
© 2020 SimonCRE. All Right Reserved | [Privacy Policy](https://simoncre.com/privacy-policy/)
- [properties](https://simoncre.com/properties/#!/main)
- [About Us](https://simoncre.com/about-us/)
- [development](https://simoncre.com/development/)
- [acquisitions](https://simoncre.com/acquisitions/)
- [Tenants](https://simoncre.com/tenants/)
- [Brokers](https://simoncre.com/brokers/)
- [Buyers](https://simoncre.com/buyers/)
- [Sellers](https://simoncre.com/sellers/)
- [Fans](https://simoncre.com/fans/)
- guide
- [Understanding Build To Suit Development](https://info.simoncre.com/understanding-build-to-suit-development)
- [The Commercial Real Estate Development Process](https://info.simoncre.com/the-commercial-real-estate-development-process)
- [Build to Suit FAQ](https://info.simoncre.com/build-to-suit-development-faq)
- [Why Use a Preferred Developer?](https://info.simoncre.com/why-use-a-preferred-developer)
- [What to Know About Commercial Redevelopment](https://info.simoncre.com/what-to-know-about-commercial-redevelopment)