Build-to-suit consultant in Florida and New York

How a build-to-suit works, step by step

Every build-to-suit follows roughly the same sequence, even when the building is a 3,000 square foot drive-thru and not a distribution box. The order matters, because each step fixes something the next step depends on. When a step gets skipped, it usually comes back later as a change order or a rent dispute.

1. Define the requirement. The occupant writes down what the building has to do: size range, clear height, parking count, drive-thru stacking, loading, power, exam rooms, whatever the operation needs. A prototype plan helps if the user has one.
2. Search and test sites. We look for land that fits the footprint after setbacks, stormwater, parking and access are taken out. A parcel that looks big enough on an aerial often is not once the engineer draws the retention pond.
3. Sign a letter of intent. The LOI sets the deal structure (lease or purchase), the rent methodology, the term, the delivery target and who controls design.
4. Feasibility and entitlements. Surveys, environmental work, geotechnical borings, a zoning analysis and pre-application meetings with the city or county. This is where most schedules are won or lost.
5. Design and pricing. Drawings move from schematic to construction documents, and the budget moves from an estimate to bids. The rent gets trued up against real numbers.
6. Lease and work letter execution. The lease and its construction exhibit are signed, usually with conditions tied to permits and financing.
7. Permits and construction. The developer builds the shell and, depending on the deal, the interior. The tenant’s team watches the schedule and the specification.
8. Delivery, punch list and rent commencement. Substantial completion, the certificate of occupancy, a walk-through, and the clock on rent starts.

We stay on the same file through all eight steps. That continuity is the main reason clients bring us in early, before a site is under contract.

BTS lease vs purchase vs sale-leaseback

A build-to-suit can end in three different ownership positions. The right one depends on how the occupant thinks about capital, its balance sheet and how long it plans to stay. Accounting and tax treatment differs for each; confirm the effect on your books with your CPA before choosing.

The BTS lease is the most common for retail pads, medical outpatient buildings and quick-service restaurants. The purchase route shows up more often with schools, owner-users in flex buildings and medical groups that want to own their real estate. Sale-leasebacks tend to come from operators with in-house development staff who build their own prototype and then sell the finished, leased building to an investor, sometimes a 1031 exchange buyer. If you are on that buying side, our 1031 exchange advisory and investment sales pages explain how we evaluate those leases.

How build-to-suit rent is usually set

Build-to-suit rent is rarely set by looking at comparable leases down the street. It is usually set as a return on the total project cost. The developer adds up everything it will spend to deliver the building and applies a negotiated rate of return to that number. That annual figure becomes the base rent, typically on a net basis, with escalations over the term.

The arguments are over what counts as project cost and what rate applies. Total project cost normally includes the land (at purchase price or an agreed value), hard costs, soft costs such as design, engineering, permits and impact fees, financing costs during construction, and a developer fee. Each of those lines is negotiable. A land value marked up to today’s appraisal produces a different rent than land carried at what the developer paid two years ago.

The rate itself tracks the market for net-leased real estate: the tenant’s credit, the length of the lease, the use and the location all push it one way or the other. A long lease with a strong credit tenant generally supports a lower rate than a short lease with a newer operator. We do not publish a typical rate, because it moves with interest rates and the investment market. We get current indications for each deal.

Most BTS leases also include a rent adjustment clause: rent is set on an estimated budget at signing and adjusted to the actual final cost at delivery, often with a cap on the increase. Tenant-requested changes usually flow into the cost and the rent. Developer mistakes and overruns on items it controls should not. We make sure the lease says which is which.

Work letters and delivery dates

The work letter is the construction exhibit to the lease. It decides what gets built, to what standard, who pays for what and what happens when things change. In a build-to-suit it does more of the heavy lifting than the lease body does, and it is the document tenants read least carefully.

What a good work letter pins down

• The approved plan set and outline specification, attached by name and date, so nobody argues later about which version governs.
• A clear line between shell work, site work and interior improvements, and who pays for each.
• The change order process: how a change is requested, priced, approved and reflected in rent or a tenant payment.
• The definition of substantial completion and who certifies it (the architect, a third party, or both sides).
• Punch list timing and holdbacks for incomplete items.
• Warranty terms on the roof, HVAC and building systems, and how they pass through to the tenant if the tenant is responsible for repairs.

Delivery dates with consequences

A target delivery date without remedies is a hope. We negotiate an outside date tied to specific remedies: rent abatement days for each day of delay after a grace period, a right to terminate after a longer outside date, and sometimes reimbursement of holdover costs at the tenant’s current location. Developers will ask for force majeure and tenant-delay carve-outs, which is fair. The fight is over how broadly those are written. In Florida, we pay close attention to how named storms and the permitting backlogs that follow them are handled, because a hurricane in September can move a spring opening.

Site selection and entitlements in Florida

In Florida, the land question is usually about what it takes to make a parcel buildable, more than whether the use is allowed. Zoning matters, but stormwater, access, utilities and flood elevation tend to decide whether a pad works and what it costs.

Site plan approval by city or county

Each jurisdiction has its own process. Unincorporated Lee County issues development orders; Collier County reviews site development plans; cities such as Cape Coral, Fort Myers, Naples and Bonita Springs run their own reviews, and Miami (under Miami 21) and Fort Lauderdale (under its Unified Land Development Regulations) have their own codes. We start with a pre-application meeting whenever the jurisdiction offers one. It is the cheapest way to find out what staff will push back on.

Stormwater, access and utilities

Most commercial sites in South Florida need a water management permit, often an Environmental Resource Permit through the South Florida Water Management District, plus local engineering approval. Turn lanes, driveway spacing and median openings on state roads involve FDOT, and on county roads the county traffic staff. A drive-thru or medical user that depends on a left turn in needs that confirmed before the LOI is binding. Water and sewer availability, and who pays to extend lines, belongs on the checklist too.

Impact fees

Florida counties and many cities charge impact fees for roads, parks, schools, fire and other services, calculated on the use and size of the building. On a restaurant or medical building they can be a meaningful line in the budget, and they flow into project cost and therefore rent. Rates change and some jurisdictions adjust them periodically, so we pull current schedules for each site and check whether credits apply for existing buildings being replaced.

Florida Building Code wind and flood requirements

The Florida Building Code sets wind design based on location and risk category, and Miami-Dade and Broward sit in the High-Velocity Hurricane Zone, which carries stricter product approval and testing requirements for things like windows, doors and roofing. On the Gulf Coast, wind design and product approvals still shape the shell budget. Flood zone matters just as much: in FEMA special flood hazard areas the building has to meet elevation or floodproofing standards, and the finished floor height drives fill, ramps, loading dock grades and sometimes the whole site layout. We get a survey with elevations early, because a pad that needs several feet of fill is a different budget.

Site selection and approvals in New York

New York City build-to-suits are rarer and harder, which is part of why they need careful planning. Land is scarce, most sites have existing buildings or lot-line neighbors, and approvals run through a different set of agencies.

• Zoning. The NYC Zoning Resolution sets use, bulk, floor area and parking rules by district. Manufacturing and commercial districts in places like Sunset Park, Red Hook and Gowanus each have their own limits, and some sites sit in special districts or rezoned areas with different rules. We get a zoning analysis from an architect or land use attorney before the deal is priced.
• Variances and special permits. When the as-of-right envelope does not work, the Board of Standards and Appeals can grant variances and certain special permits. A rezoning goes through the city’s land use review process (ULURP), which is a much longer road. Either one belongs in the schedule as a contingency, with its own outside dates.
• Department of Buildings. Plans are filed with DOB, which reviews and issues permits and, at the end, the certificate of occupancy. Filings, objections, inspections and sign-offs from other agencies (FDNY on fire systems, for example) all affect delivery.
• Energy and emissions rules. New buildings must meet the city energy code, and larger buildings are subject to Local Law 97 emissions limits. Those requirements affect mechanical design and long-term operating cost, which matters to whoever pays utilities and compliance costs under the lease.
• Flood. Waterfront areas in Brooklyn fall within flood zones, where the NYC Building Code’s flood-resistant construction rules apply. Mechanical equipment placement and ground-floor design follow from that.

Rules here change often. We confirm current requirements with counsel and the design team for every site.

Uses that commonly go build-to-suit

The tenant side and the developer side

We work for one side per deal and tell everyone in writing which side that is. The concerns are different, and knowing both helps either client.

Tenants want a building that works on day one, a rent that reflects real cost and not padded cost, a delivery date with teeth and flexibility to assign or sublet if the business changes. Their biggest risk is committing to a long lease on a budget that has not been bid yet.

Developers and landowners want a lease a lender will finance, protection from tenant-driven changes, a clean definition of when rent starts and enough term to justify the capital. Their biggest risk is a site problem (soil, wetlands, flood, a traffic denial) that shows up after they have committed to a delivery date.

When we represent a landowner with a site that suits a build-to-suit user, that work overlaps with our development sites and land and landlord representation services.

Where build-to-suits go wrong, and what we do about it

None of this removes risk. It puts each risk with the party best able to control it, in writing, before anyone is locked in.

How the Florida Certified General Contractor license fits

Sal holds a Florida Certified General Contractor license and a Florida plumbing contractor license. A certified license is issued at the state level, so it is not limited to one county. In practice it means the person reviewing your lease can also read a bid package, spot an exclusion that will turn into a change order, question a schedule that does not leave room for inspections and talk to the project engineer in the engineer’s own terms.

On most build-to-suits we act as your broker or advisor, and a separate contractor builds the project. Any situation where we would serve in more than one role on the same deal is disclosed in writing up front, and you decide whether you are comfortable with it. The Florida license does not apply in New York. On New York projects we work alongside locally licensed and registered contractors, and our role is on the real estate and owner’s side through owner’s representation and project management.

How our fees work on a build-to-suit

Compensation depends on which side we represent and what we do.

• Lease brokerage. On a build-to-suit lease, a leasing commission is commonly paid by the landlord or developer, as on other commercial leases. When we represent the tenant, we disclose how and by whom we are paid.
• Land and purchase transactions. On a site sale or turnkey purchase, a commission is typically paid at closing under a written agreement.
• Consulting and owner’s representation. Feasibility studies, budget review and construction oversight are usually billed as a fixed fee, a monthly retainer or a percentage of project cost, agreed in writing before work starts.

We put the fee arrangement in the engagement letter so it is clear from the first meeting. We do not take undisclosed payments from contractors, vendors or developers.

Market notes

Southwest Florida. Most of our build-to-suit work sits here: pads along growth corridors in Fort Myers and Estero, flex and contractor buildings, and service retail following rooftops into Cape Coral and Lehigh Acres. Flood elevation, stormwater and impact fees dominate feasibility. Once a building is delivered, we can also handle property management for owners in this region.

Miami and Fort Lauderdale. Land is pricier and sites are tighter. Industrial and flex around Doral and infill retail are common requirements, and High-Velocity Hurricane Zone product approvals affect the shell budget.

Brooklyn and Manhattan. True ground-up build-to-suits are less common, and many deals are heavy redevelopments of existing buildings to a tenant’s specification. Zoning analysis and DOB timing drive everything.

Build-to-suit checklist

1. Written requirement: size range, layout, parking, loading, power and any special systems.
2. Target markets and trade areas, with must-have and nice-to-have site features.
3. Preferred structure: lease, turnkey purchase or own-and-sell.
4. Lease term you can commit to, and the credit or financial statements you can share.
5. Prototype plans or a past building you want to replicate.
6. Latest acceptable opening date, and what a late opening costs your business.
7. Your attorney, CPA and, if you have one, architect, identified at the start.
8. Budget authority: who on your side approves changes and how quickly.

Send us what you have, even if the list is half done. Call or text 239-256-5005, email info@diberealestate.com or use our contact page.