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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Thursday, February 22, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

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.

Faculty

Lisa M. Zana
Partner
Shipman & Goodwin LLP

Ms. Zana’s commercial real estate clients are situated throughout the U.S. with a focus on New York’s tri-state area, and include private developers, public companies, institutional owners, banks, and lessees of millions of square feet of real estate across the country in the luxury residential, mixed-use, retail, commercial office, data centers and colocation facilities, hotel and hospitality, healthcare and higher education industries. Her specific experience and areas of focus include: representing public and private companies that use millions of square feet of real estate, in negotiating build-to-suit and credit-tenant office leases, development agreements and state tax incentive agreements; acquiring, selling, financing and leasing data centers and colocation facilities; negotiating ground leases; negotiating retail leases on behalf of developers and the end retail users; arranging for and negotiating debt and equity financing; and negotiating corporate- and property-level acquisitions and sales.

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Jennifer Stenman
Shareholder
Reinhart Boerner Van Deuren S.C.

Ms. Stenman counsels commercial property owners and developers in sales, acquisitions and leasing transactions. In her extensive experience with commercial leasing, Ms. Stenman primarily assists landlords of office, industrial and retail assets in negotiating and drafting lease documents, including build to suit leases, and handling landlord/tenant matters. She is nimble and well-versed in the many issues that impact commercial leasing transactions and can anticipate challenges to set her clients up for success. Ms. Stenman’s practice is nationwide and concentrates predominately on large industrial projects such as warehouses, distribution centers and manufacturing facilities.

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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?