Build-to-Suit (BTS)
A construction arrangement where a building is custom-designed and built for a specific tenant's requirements, typically with a long-term lease commitment.
Definition
Build-to-suit is a development approach where a property is constructed to meet a specific tenant's or owner-occupant's exact specifications. The tenant commits to a long-term lease (often 10-20 years) before construction begins, and the building is designed around their operational needs—specialized clear heights, unique loading configurations, reinforced floors, specific power requirements, or custom office layouts. BTS is common for larger industrial users (100,000+ SF) but increasingly relevant for owner-occupants in the small bay space who want purpose-built facilities. BTS deals require longer planning horizons but eliminate the compromises of adapting to existing buildings.
Example
A growing HVAC company with 25 employees decides to build rather than lease. They work with a developer on a 15,000 SF build-to-suit: 3,000 SF of custom office space, a training room, specialized electrical for equipment testing, and a wash bay for service vehicles. They sign a 15-year lease at completion.