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How do build to suit leases work?

A build-to-suit lease is a common arrangement whereby the landlord constructs a free-standing building to meet the specifications of a particular client, who then becomes the sole occupant of the building.

What is a build to suit lease?

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.

What does it mean build to suit?

Definition. A way of leasing property, usually for commercial purposes, in which the developer or landlord builds to a tenant's specifications. The landowner pays for the construction to the specifications of the tenant, and the tenant then leases the land and building from the landowner, who retains ownership.

How does a build to suit differ from a sale leaseback?

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.

What does ground lease mean?

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.

What does build suit include?

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.

What does build to suit mean?

Build to suit is a type of real estate transaction where a property owner or developer will construct a building for sale or lease that will be built to the tenant's or buyer's specifications. Examples.

What is a reverse build to suit?

Reverse build-to-suit lease: An arrangement in which a tenant constructs a building for itself, using funds ultimately provided by the landlord, and upon completion occupies the building as a tenant under a long term lease.

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