Just like everything else, there are plenty of options for build-to-suit projects. If you want to know more, read more below!
Efficiency. Customization. Quality. You most likely desire all of these features in your dream commercial environment.
And there are several methods to do from renting out current space to renovating an older building.
Although every choice has benefits and drawbacks, developing a construct to suit may be the best approach to realize your goal (BTS).
But while choosing the BTS method and determining whether it’s appropriate for you, there are a few crucial factors to keep in mind. Here are five of them that we’ll look at.
Is a new construction the best solution because the setup, space, design, and customization are unique?
There is no better method to give customers in today’s market, who seek a personalized experience than to modify your requirements to satisfy their needs. If you’re a tenant trying to convey your brand via design while also maximizing space, efficiency, and enjoyment, a build-to-suit may be the ideal option for expanding.
Do your requirements/specs make it too complicated, time-consuming, and ineffective to find a suitable location to rent?
It might take a lot of effort and lead to disappointment when attempting to discover an existing place that can accommodate your unique demands. Consider Phoenix, where the fourth-highest amount of unoccupied property in the country. It is in the central business district, despite 2017 ending with the greatest quarter of net absorption in five years and resulting in reduced vacancy rates.
Do you possess the required long-term dedication?
Many leases for new construction are for extended periods, ranging from 10 to 20 years. Be prepared to accept the standard build-to-suit lease deal. Especially if labor is specialized, as the duration of the lease is crucial to fully recover the owner’s investment in the building. It is vital to include the time needed for analysis, facility acquisition, design, and construction.
Is your company in good financial standing?
Investment grade tenants—or tenants rated just below investment grade—are often businesses that can do build to fit because they have a solid track record of financial performance and are reliable. Typically, your credit rating will define the required specs and expenses. Therefore, a project with superior credit will be more realistic and doable.
Are you able and willing to stick to the site’s price and lease?
Rent is a key issue for tenants. Despite the fact that commercial developers usually want to know the exact figure, they cannot establish a rent until they have determined the total project expenditures. Before constructing a structure, the cost of upgrades must also be addressed.
Those who pick these kinds of projects can benefit from the special advantages offered by build-to-suit development. And build to suit can be the best option for you if your company has a unique concept, is ready for a long-term commitment, and can afford the associated expenditures.
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Come join us! Email me at mark@dolphinpi.us to find out more about our next real estate investment.