Build-to-Suit Leases: Key Considerations for Landlords, Developers, and Tenants; Pitfalls to Avoid | Strafford Webinar

Lisa M. Zana will present: Build-to-Suit Leases: Key Considerations for Landlords, Developers, and Tenants; Pitfalls to Avoid Pros vs. Cons, Selecting the Right Lease Type, Negotiating Unique Terms

This CLE webinar will provide an in-depth look at build-to-suit (BTS) leases and address the risks and benefits for landlords/developers and tenants. The panel will discuss considerations and terms that are unique to BTS leases as compared to standard commercial leases of which counsel should be aware to best protect their clients' interests during the negotiation and drafting process. The panel will also provide best practices for drafting.

Description

A BTS lease is an agreement between a landlord/developer and tenant to build a commercial building that meets specific tenant requirements. Although BTS leases contain similar components as standard commercial leases, there are unique risks and benefits for the parties to a BTS lease of which counsel should be aware to best protect their clients' interests during the negotiation and drafting process.

For tenants, a BTS lease offers certain financial advantages and flexibility in addition to obtaining a property designed to suit the tenant's specifications. However, given that the term of a BTS lease may run for 10-20 years, tenants assume the risks of a long-term lease and the concurrent obligations.

For landlords and/or developers, a BTS lease secures a long-term tenant; however, they acquire more risk during the development process, possibly incurring costs for a custom build, and risk being able to rent the custom property to others at the end of the lease term or if the tenant defaults.

Listen as our expert panel provides an in-depth look at BTS leases and addresses the risks and benefits for landlords/developers and tenants. The panel will discuss considerations and terms that are unique to BTS leases as compared to standard commercial leases and provide best practices for drafting and mitigating inherent risks.

Outline

1. Overview of the BTS process
   1. Pros and cons
   2. Due diligence process
   3. Lease types
      1. Single, double, and triple net
      2. Reverse BTS
      3. Sale-leaseback
      4. Developer agreement
      5. Others
         
         
2. Negotiating and drafting the BTS lease: key terms and considerations
   1. Parties to the lease
   2. Premises description
   3. Lease term
   4. Renewal options
   5. Commencement date vs. completion date
   6. Rent amount
   7. Taxes
   8. Use/restrictions
   9. Plans/approvals/change orders
   10. Maintenance and repair
   11. Purchase options
   12. Warranties
   13. Termination
   14. Work letter/scope of work
   15. Other considerations
       
       
3. Best practices for practitioners

Benefits

The panel will review these and other important issues:

• Under what circumstances should counsel and their clients consider a BTS lease?
• What are the risks and benefits of a BTS lease for landlords/developers? For tenants?
• What types of leases are used for a BTS project?
• What terms and considerations are unique to BTS leases as compared to standard commercial leases?
• What are best practices for mitigating risks for each party?