Built to suit
Built-to-suit is a property term that describes a scenario in which a developer (or building owner) provides a building that is built (or refurbished) to a tenant’s exact specification. The developer finances the project and is responsible for its design, construction and completion. The developer retains ownership once the land and the building(s) are leased to the tenant.
Built-to-suit properties can range from single units to multi-building facilities. Agreements are usually made between the developer and a single tenant, although more than one tenant may be involved.
According to Savvas Kotsopoulos of law firm Miller Thomson, the arrangement between developer and tenant essentially comprises two agreements:
- A development or construction agreement, the result of a request for proposal (RFP) process, which defines the relationship between the landlord and tenant from the design through construction of the building, and
- A lease agreement which stipulates the terms of the occupancy post-construction. In some cases, the provisions regarding the construction of the building are included in the lease itself or captured in an accompanying ‘work letter’.
The construction aspect of this arrangement is usually the key issue and the most complicated, warranting close attention to the landlord’s and the tenant’s responsibilities in this regard.
Build-to-suit agreements can be highly complex, as they must encompass issues of design, construction, timing and financing and so they must be drafted carefully.
[edit] Further information
For more detailed information, see ‘Laying the Foundation for a Build-to-Suit Lease’, by Savvas Kotsopoulos of Miller Thomson. https://www.millerthomson.com/en/publications/communiques-and-updates/leasing-times/december-3-2012/laying-the-foundation-for-a-build-to-suit/
[edit] Related articles on Designing Buildings Wiki
- Break clauses in leases.
- Build to rent.
- Development appraisal.
- Feasibility studies for construction projects.
- Funding options.
- Funding prospectus.
- Ground rent.
- Housebuilder.
- Landlord and Tenant Act.
- Lease Negotiations - Tenants Checklist.
- Leasehold.
- Overbuild.
- Property development finance.
- Rent to buy.
- Speculative construction.
- Statutory declaration excluding security of tenure.
- Types of development.
- Vacant possession.
Featured articles and news
Shading for housing, a design guide
A look back at embedding a new culture of shading.
The Architectural Technology Awards
The AT Awards 2025 are open for entries!
ECA Blueprint for Electrification
The 'mosaic of interconnected challenges' and how to deliver the UK’s Transition to Clean Power.
Grenfell Tower Principal Contractor Award notice
Tower repair and maintenance contractor announced as demolition contractor.
Passivhaus social homes benefit from heat pump service
Sixteen new homes designed and built to achieve Passivhaus constructed in Dumfries & Galloway.
CABE Publishes Results of 2025 Building Control Survey
Concern over lack of understanding of how roles have changed since the introduction of the BSA 2022.
British Architectural Sculpture 1851-1951
A rich heritage of decorative and figurative sculpture. Book review.
A programme to tackle the lack of diversity.
Independent Building Control review panel
Five members of the newly established, Grenfell Tower Inquiry recommended, panel appointed.
Welsh Recharging Electrical Skills Charter progresses
ECA progressing on the ‘asks’ of the Recharging Electrical Skills Charter at the Senedd in Wales.
A brief history from 1890s to 2020s.
CIOB and CORBON combine forces
To elevate professional standards in Nigeria’s construction industry.
Amendment to the GB Energy Bill welcomed by ECA
Move prevents nationally-owned energy company from investing in solar panels produced by modern slavery.
Gregor Harvie argues that AI is state-sanctioned theft of IP.
Experimental AI housing target help for councils
Experimental AI could help councils meet housing targets by digitising records.
BSRIA Occupant Wellbeing survey BOW
Occupant satisfaction and wellbeing tool inc. physical environment, indoor facilities, functionality and accessibility.