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Build-to-Suit Surge Boils Down to Dollars and Sense

DALLAS-Economic changes force "dollars and sense" decisions from companies looking for more space and a growing proclivity to tailor structures. As spec construction shrinks, build-to-suits swell in popularity, particularly for large users.

By Connie Gore | Updated on September 24, 2001

DALLAS-Industrial build-to-suits are an “up tick” in the Dallas-Ft. Worth market, once a hub for speculative building. Blame it on the changing economy or accept that companies really want to handcraft needs and save dollars in the long run.

Two DFW executives say build-to-suit popularity boils down to dollars and “sense.” The space most often can be had at a cheaper rate by executing a long-term lease. Companies get what they want without the compromise of retrofitting an existing building. And, project financing is practically a walk in the park if a tenant is in hand.

“More often than not, the big component is economics,” William G. Guthrey, vice president of marketing for Newport Beach, CA-based Koll Development Co.’s southwest team, tells GlobeSt.com. Roughly 35% of Koll’s eight million-sf CentrePort came out of the ground as build-to-suits. Most are attached to big name tenants in the business world that boast deep enough pockets to sign long-term leases plus reap an estimated 10% savings over the cost to retrofit existing space.

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