Build-to-suit leases: developer builds to tenant spec, tenant commits for 15-25 years. Learn BTS structure, NNN operation, and critical abstractions.
A Build-to-Suit Lease is a long-term lease where the landlord (developer) constructs a building to the tenant's exact specifications on land the landlord owns or acquires. The tenant commits to the lease before construction begins, typically for 15-25 years. After completion, the lease usually operates as a NNN structure. BTS transactions are common for corporate headquarters, distribution centers, and large retail users.
Typical Industries
Typical Term Length
15–25 years
Pros
Cons
Pros
Cons
These are the highest-priority fields Lextract extracts from BTS leases. Click any field to learn what it means and why it matters.
Lextract automatically detects these red flags in BTS leases. Click any flag to learn the impact and what to do.
Rent commencement in a build-to-suit lease is tied to construction completion and delivery of the premises to the tenant. The lease will specify a rent commencement date based on substantial completion, a certificate of occupancy, or a negotiated number of days after delivery. Tenants should negotiate a hard rent commencement date rather than one solely based on construction milestones.
Most build-to-suit leases address construction delays through force majeure provisions and landlord delay provisions. If the landlord causes delays, tenants typically receive free rent credits or have the right to extend the lease term at their option. If delays exceed a threshold, some leases give the tenant a termination right. These provisions must be carefully negotiated before execution.
Lextract extracts all 126 standard fields from build-to-suit leases including the rent commencement trigger, construction completion definitions, tenant improvement allowance (if any), renewal options, termination rights, and the operating expense structure post-completion. Red flag detection flags missing termination options, absent renewal rights, and unclear restoration obligations at expiration.
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