What is a build to suit?
Seeking to optimize the performance of their operations and balance sheets, many companies have found in the build-to-suit model a perfect formula to access real estate and industrial spaces that represent benefits for them at every level.
Build to suit: A new trend in the real estate sector
Build to suit looks for the construction of real estate or industrial space based on the specific needs and requests of a tenant, who will occupy this infrastructure in the future.
As a result, lessee companies can optimize the execution of their different production, logistics, or warehousing activities by having an optimal infrastructure for their operations.
This particular business has begun to gain ground in the real estate sector. More and more companies prefer to lease the facilities where they carry out their activities as an alternative to buying their own real estate, as it is more economical and less complex.
In fact, world-renowned companies such as Amazon and Mercado Libre have adopted this real estate business model1 to have distribution centers that fully meet their requirements.
Build to suit’s main characteristics
Among the essential characteristics of this type of real estate lease we highlight the following:
- Construction works that adapt to the client’s needs.
- Contractual agreements that may cover long-term periods.
- Faster works execution.
- The different types of properties that are built integrate optimal conditions in their construction (location, security, design, and others).
Benefits of a build to suit
Some key advantages offered by this real estate lease alternative are:
- Low investment: The leasing company does not need to invest part of its capital or resort to debt for financing the purchase of a space to develop its activities.
- Stability: This real estate business model can offer great stability for the parties involved, since contracts can be extended for long periods of time, such as 10, 15, or 20 years.
- Sustainability: The different construction works are carried out through sustainable actions for the planet.
- Flexibility: The companies that develop in this type of real estate business can manufacture different types of properties according to the specific needs of the clients that request their services.
- Operational efficiency: Tenants can achieve high levels of efficiency and productivity in their operations by being in a space that is fully adapted to their needs.
It is important to have a space that adapts to the business’ operation since it can greatly optimize the performance of the organization’s activities, reducing costs and waste. This way, by having efficient production processes and delivering a better service to their customers, companies can obtain a great advantage in the market over the competition,
At Advance Real Estate, we specialize in the acquisition, management, and lease of industrial projects in Mexico, and we offer you the possibility of accessing spaces completely adapted to your company’s needs.
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