What is build to suit lease?
Build-to-suit lease is a model that allows the tenant to find a suitable location, design and customise a new factory premises to meet his unique needs in an accelerated timeline without the large capital expenditure that comes with acquisition and construction.
In a build-to-suit lease, a customer works with a developer to design and build a customised factory and then leases it from the developer. Under this structure, the customer need not own the factory. As a result, real estate resources can be directed to other areas to grow the business while strengthening the balance sheet. The end result is a new, customised factory premises with a very low expenditure of capital.
For business owners, a build-to-suit lease arrangement permits the company to move into a new, customised factory premises much faster than if they were to build independently. It also permits the company to keep its focus on growth without the myriad distractions, time commitment, and capital drain that a build-to-own decision entails. A build-to-suit lease also yields a customised factory designed to enhance the company’s image, productivity, and logistics. These critical factors are often compromised when leasing an existing factory.
Advantages of build to suit lease
The benefits of using the build-to-suit lease approach are numerous:
Low capital investment and financing risk
Instead of committing high real estate resources and bearing real estate-related risk, you will now be able to allocate the company capital for operational resources. Through the process of taking on most of the financing, developing and construction management responsibilities, we allow you to focus more time and resources on the operations. With long-term indebtedness on balance sheets eliminated, you will have more confidence in making alternative investments, yet with long term lease and renewal option you can still enjoy complete control of the factory for its economic life. Also, with purchase option, you may purchase the factory if the economic/market conditions warrant such action.
Maximum space efficiency
It allows you to achieve maximum space efficiency since the space is designed specifically to meet your operation’s needs. New construction allows you to incorporate the most cost-effective and efficient systems in the project including energy saving, fire fighting and logistic aspects, thereby reducing operating and occupancy costs.
The building will be designed to project the company's image.
No hassle and bustle
Building a new factory involves a significant investment of time and financial resources. We are able to divert all your attention and resources away from the often complex and cumbersome responsibilities associated with building a new factory. We absorb the time consuming tasks associated with development such as site acquisition, selecting contractors, preparing drawings, obtaining bids, procuring financing, construction, securing permits, etc. and allow you to concentrate on your business.