Experts explain ‘built-to-suit’ construction – and why it’s hot right now

In Southwest Florida, custom-built company facilities are becoming increasingly desirable.

As Published in the Naples Daily News – 6:00 a.m. ET August 13, 2020
A rendering for a “build-to-suit” project.

The rush is on in Southwest Florida as companies continue to expand or relocate to the area — and they need buildings to suit their specific requirements.

As Southwest Florida’s population growth continues unabated, businesses are jumping at opportunities to get their own buildings on terms that will allow them to boost and secure their revenues well into the future.

Dubbed “build-to-suits,” these commercial buildings are specially constructed to meet particular users’ physical and design specifications

Real estate expert Derek Bornhorst, a principal with Lee & Associates commercial real estate brokerage, who, with his team, has successfully orchestrated build-to-suit projects throughout Southwest Florida, said: “The conditions are perfect right now for this kind of real estate deal, in which landowners, investors, business owners, developers, construction companies and brokers all work together to find a location and build a facility to the user’s exact specifications for their operation. We think this is the niche in our market that’s underserved.”

There’s well-located land that’s ready for development, construction firms are eager to build, and Southwest Florida’s population boom helps ensure long-term economic growth for businesses. Landowners with parcels in Southwest Florida can take advantage of the demand for commercial build-to-suit facilities, but only if they’re prepared in advance.

While existing buildings may not be able to accommodate companies with specific needs, such as extra parking, outside storage space or other requirements, a landowner can provide a business owner with a blank canvas to design the perfect site.

“If you’re a landowner with a development order with an approved site plan already in hand, you’re in a great position to benefit from this trend,” said Bob Johnston, a principal with Lee & Associates commercial real estate brokerage.

Obtaining a development order from the municipality ahead of time can save a build-to-suit candidate six to nine months, a distinct advantage when it comes to having land ready for build-to-suit construction. Time equals money, and Johnston estimates that the return on the funds spent to get a development order can be a factor of 1.5 times or higher. He recommends that a landowner meet with his team to discuss potential layouts and work with a civil engineer on a generic site plan that can be modified at a later date, when a build-to-suit candidate comes calling.

“You don’t want to miss this development cycle,” Johnston said. Bornhorst agrees.

They recommend that landowners who have vacant land currently zoned for agriculture, for instance, begin to look into the cost and time necessary to switch to a commercial use. Rezoning land can take a year to 18 months, which adds significant time to the overall land development process.

As facilitators for build-to-suit projects, Johnston and Bornhorst, along with Jerry Messonnier, a fellow principal at Lee & Associates, help companies that want buildings to suit their specific needs but prefer to lease space.

“A lot of companies don’t like to own real estate,” Johnston said. “It keeps their balance sheet a little cleaner, and having a facility built to their exact needs allows them to focus on operating their business more efficiently.”

For example, the Lee & Associates team recently coordinated the sale of land to an investment group that built a facility off Treeline Avenue in Fort Myers for Conditioned Air, an air conditioning contractor that required a custom interior build-out and, in order to provide extra parking for its fleet of repair vehicles and its employees’ cars, much more land than is typically available for a building of that particular size.

Crucial to the arrangement was an all-hands-on-deck strategy. “The net result was the developer ended up with a building occupied by a quality tenant on a long-term lease, which they could either keep for the long term or sell to a third party, and the tenant got a building that fit their exact requirements that was not available anywhere else in the market,” Messonnier said.

“We put all the pieces together, took a team approach and got it done,” said Bornhorst, who noted that similar build-to-suit deals occurred recently in Lee County for companies such as cancer-testing laboratory NeoGenomics, logistics firm Scotlynn and Florida Cancer Specialists.

Watch this video to view the build-to-suit commercial neighborhood in Fort Myers with Interstate 75 frontage.

Lee & Associates forecasts that, as the population growth continues in Southwest Florida, more such deals are likely along the Interstate 75 corridor as far north as North Fort Myers. In particular, firms that cater to the construction and development industries need uniquely designed spaces that existing buildings can’t deliver, with features like plenty of parking and efficiently planned warehouses that can accommodate large numbers of employees.

“As our population grows, our ability to attract build-to-suit projects will increase,” Johnston said. “We have the connections and experience to make those kinds of deals happen quickly.”

To learn more about upcoming build-to-suit deals, consult with the experts at Lee & Associates by calling 239-210-7610 or visiting lee-fl.com.

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The Naples – Ft Myers office was established in 2011 in response to the explosive growth in Southwest Florida and is now recognized as one of the most successful commercial brokerage firms in Southwest Florida. We are backed by the resources of the largest broker-owned firm in the nation. Each of our nationwide Lee & Associates offices has a strong local ownership combined with a powerful platform from the national network which includes 59 offices and nearly 1,000 brokerage professionals. These resources, combined with the office’s in-depth research capabilities and cutting-edge technology, enables our professionals to offer their clients the highest level of service in the industry.

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