As a turnkey build-to-suit developer we act as a single source of responsibility for both delivery and financing. Our build-to-suit approach prompts companies to evaluate their occupancy strategies from taking into consideration the most efficient way of configuring space to engineering the real estate to provide the most cost efficient occupancy strategy. This comprehensive approach to corporate build-to-suit real estate links the business strategy to the real estate.

An integral part of the corporate build-to-suit development process is the financial analysis involved in determining the most appropriate ownership/capitalization structure. Designing a financing program to meet economic objectives involves understanding the corporate culture and the short- and long-term financial objectives. Our build-to-suit experience leads this program whereby the financial, tax operation and accounting priorities are contrasted against various ownership/financing options. This process can be used as a starting point in developing a build-to-suit program for a specific user.

Finance and Advisory 

Joint ventures, third party ownership and straight ownership are just a few of the alternative capitalization/ownership programs available to help organizations achieve their specific financial and control objectives as determined by their long term real estate strategy. In order to determine the most appropriate build-to-suit program for our clients, Gilbane conducts a rigorous analysis of transaction options that satisfy cost of occupancy, operating, control, risk profile, and balance sheet treatment objectives.

There are many variables that factor into the determination of an appropriate ownership structure and, ultimately, cost of occupancy. Key factors include:

  • Lease structure and covenants
  • Lease term
  • Credit quality of the tenant
  • Investment quality of the tenant
  • Risk profile of the client (e.g., ability/willingness to take interest rate exposure)
  • Risk profile of the Developer/Lessor
  • Allocation of tax and property residual value
  • Accounting treatment of lease obligation and tenant improvements
  • Availability of tax incentives/public subsidies
  • Capital market environment
  • Capital structure - debt/equity requirements

Our delineated build-to-suit process integrates and organizes the myriad of interrelated activities such as site identification, design, schedule, debt placement, construction and fit-out with the factors above to ensure timely and informed decision-making, resulting in the creation of a realistic capitalization plan.