Build-to-Suit

Understand build-to-suit in Canadian real estate — what it is, its benefits, and how it works for tenants and developers.

Build-to-Suit

August 07, 2025


What is Build-to-Suit?

Build-to-suit is a real estate development strategy where a property is custom-built to meet the specifications of a tenant or buyer.

Why Build-to-Suit Matters in Real Estate

In Canadian commercial and industrial real estate, build-to-suit projects allow tenants to occupy customized facilities while developers secure long-term lease commitments.



Advantages:
  • Tenants receive tailored property designs
  • Developers reduce leasing risks
  • Typically structured with long-term leases



Understanding build-to-suit arrangements helps tenants and developers align business and real estate objectives.

Example of Build-to-Suit in Action

A retail chain entered into a build-to-suit agreement for a flagship store designed to their specifications.

Key Takeaways

  • Property built specifically for a tenant or buyer
  • Reduces vacancy risk for developers
  • Provides customized design for tenants
  • Common in commercial and industrial sectors
  • Usually involves long-term commitments

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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