Are You Struggling to Find a Space that Perfectly Fits Your Business Needs? Consider The Build-to-Suit Option
In today’s rapidly evolving business landscape, finding the perfect workspace can feel like searching for a needle in a haystack. Are you tired of compromising on generic properties that don’t meet your unique operational demands? The answer might lie in build-to-suit (BTS) solutions, a strategic approach that’s transforming how businesses approach real estate.
A built-to-suit arrangement involves a developer constructing a new facility tailored to a company’s unique requirements, which the company then leases or owns upon completion. This approach offers several advantages, including customization and operational control.
Advantages to Build-to-Suit:
Tailored Design: Companies can specify design elements to enhance efficiency, integrate specialized equipment, create energy efficiency, and an overall look that will align with their brand identity.
Capital Efficiency: If leasing rather than owning, businesses can allocate capital to core activities instead of investing in the real estate itself. There is also the option to do both lease and own if an organization prefers to have an operational lease but a partial investment in the facility.
Strategic Location: BTS allows companies to choose locations that optimize logistics and accessibility. Data analytic tools can help pinpoint the ideal location for your business.
Long-Term Stability: Entering long-term leases provides operational stability and potential cost savings over time by having more control over the structure of the lease and its financial structure.
Is Build-to-Suit Right for Your Business?
BTS is particularly beneficial for companies with specific facility requirements that cannot be met by existing properties. For instance, businesses needing specialized layouts, advanced technological infrastructure, or unique logistical considerations may find BTS advantageous. Examples of industries where this applies include pharmaceutical, advanced manufacturing, and data centers. Additionally, companies looking to establish a long-term presence in a strategic location without the burden of property ownership should consider this approach.
Market Trends
Recent shifts in the industrial real estate market have seen a move from speculative developments to build-to-suit projects. In the first quarter of 2024, six out of ten new industrial construction starts were BTS projects, accounting for 2.3 million square feet of the 2.7 million square feet that broke ground during that period. Hiffman
Considerations
While BTS offers numerous benefits, it’s essential to consider the commitment involved. Projects can take 12 to 36 months to complete, depending on factors like size, location, and permitting. Lease terms are typically longer, often ranging from 10 to 30 years. Therefore, businesses must assess their long-term needs and financial stability before embarking on a BTS project.
There are also risks to consider when evaluating BTS for your business, including cost overruns, delays, and regulatory hurdles. A thorough evaluation of these elements by your real estate team, including an experienced attorney, developer, architect, engineering team, and general contractor is critical when considering this approach for your business.
Build-to-Suit developments present a strategic opportunity for businesses to occupy and own facilities that are precisely aligned with their operational requirements. Rokos Advisors can help you navigate the complexities of BTS projects and secure a facility that supports your long-term objectives.
Are you ready to explore how a build-to-suit solution can transform your business? Contact Rokos Advisors today for a free consultation.
Rokos Advisors is an award-winning Minneapolis - St. Paul based commercial real estate/tenant representation firm specializing in helping businesses find the perfect office or industrial space for their company.