How does “build to suit” land leasing work? If structures are built on leased land, aren’t they then owned by the lessor after the lease period ends? What is the advantage of this arrangement?

Question

How does “build to suit” land leasing work? If structures are built on leased land, aren’t they then owned by the lessor after the lease period ends? What is the advantage of this arrangement?

In: Other

Answer 1

The owner of the land agrees to build a structure on the land for the lessee to the lessee’s requirements. The lessee agrees to lease the structure upon completion for X number of years.

The specifics are negotiated on a case by case basis.