Build-To-Suit

Some landlords agree to make improvements to the leased space or customize the leased space to accommodate the tenant's needs, and the tenant agrees to share the cost by paying a higher rent amount. This type of transaction is considered build-to-suit. Tenants sometimes prefer a build-to-suit transaction because he or she is not forced to come up with additional funds for the build-out. Tenants do not mind paying a slightly higher rent in return for a customized space. Landlords typically meet with the tenant in order to understand what the remodeling needs to include. Architects and contractors may also be invited to participate in the planning phase of the project. The lease agreement will reflect specific terms that the tenant must agree upon before construction begins. This may include an extended lease term, higher rent or other mutually agreeable terms.