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A build-to-suit (or design-build) lease is essentially a landlord/developer's agreement to construct a purpose built building, usually for a single tenant. In some cases, the provisions regarding the construction of the building are included in the lease itself or captured in an accompanying work letter.
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.
A build-to-suit (or design-build) lease is essentially a landlord/developer's agreement to construct a purpose built building, usually for a single tenant.
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.
The build to suit process entails all the steps necessary to select, acquire, finance, and lease a property on which the landlord/developer constructs a custom-building for the tenant. Generally, the landlord/developer owns the land and the building built on that property or will acquire land designated by the tenant.
A ground lease is an agreement in which a tenant is permitted to develop a piece of property during the lease period, after which the land and all improvements are turned over to the property owner.
A capital lease is a lease in which the lessor only finances the leased asset, and all other rights of ownership transfer to the lessee. This results in the decoration of the asset as the lessee's property in its general ledger, as a fixed asset. Ownership.
If the lease agreement meets at least one of the four criteria provided by the Financial Accounting Standards Board (FAST), the lease is capitalized, which means that the lessee (the company leasing the asset from another) recognizes both depreciation expense and interest expense on the lease.
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