Is Build-to-Suit Lease for Me?


Building to suit is not for every company. While leasing existing office space might take six months to a year, depending on company needs, building to suit can be a several year process, and therefore requires a long term commitment. Before building, available land must be found, a good developer selected, the design process and construction negotiations begun, and all of this before the foundation is poured. In addition, because the developer is constructing a customized building for one user, the lease term is usually a minimum of ten years in order to spread the risk over a longer period of time.

Pros and Cons

If a company is able to make such a long term commitment, however, build-to-suit leases can be an outstanding option with many advantages:

  • Location. Build-to-suit means the company can choose its location, rather than making do with what is available. These buildings are most often constructed in vibrant, high-growth areas with excellent access.

  • Space efficiency. Because the building is built to your specifications, it has just the right amount of open space to private office space. The flow of access between departments is ideal for the daily workings of the business. Being able design the office around your business creates maximum space efficiency.

  • Brand. Your company's image and personality should be reflected in your office space. Build-to-suit is uniquely suited to display your brand in the colors, finishes, and architectural design of your space.

  • New building systems. New buildings have the latest in modern systems, like HVAC, plumbing, electrical, and lighting. They completely avoid the questionable charm of cobbled together fixes and patches that come with older buildings.

  • Energy efficiency. With these new systems come cost-saving energy efficiencies. The latest technology for HVAC, lighting, and plumbing fixtures translate into less wasted water and electricity, and more dollars saved.

  • That new building smell. In the search for office space, every business owner has toured the unit with frayed carpet, stained ceilings, and odd and mysterious odors. A new building has none of these defects to distract the client from what you offer as a business.

The cons we've already discussed in part. Build-to-suit office space is a long-term commitment, and one that requires excellent credit to procure financing. It is significantly more expensive than finding and leasing vacant space, but companies may realize savings in efficiency, reduced operating costs, and an improved image among clients.

Wouldn't Owning the Building be Better?

At this point, you may wonder, why not just build your own building and own it, rather than contract with a middle man to construct it and lease it back? Constructing and owning the building is a good option for very large companies with plenty of up front capital and big borrowing power. Most companies would find it difficult to invest so much capital in the building, rather than back into the business, where they are sure to receive a better return on investment. In addition, business owners may not want the hassle of managing and operating real estate, or being tied to the building if the company outgrows it in any way.

So if your business is in need of new, efficient space designed to maximize your growth give The Principle Group a call and see if we can help!

For more information visit our website at:

or our FAQ page for Build-to-Suit Leases.

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