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An Attractively Priced 'Build-To-Suit' REIT That Yields 6.1%

A "build-to-suit" is a real estate term that describes the process in which a developer or landlord agrees to develop a structure based on specifications provided by the tenant. The parties typically agree to sign a long-term lease whereby the tenant will occupy the premises upon completion of the project. The landlord/developer must acquire the land and fund the project to meet the prospective tenant's specifications.

For tenants, there are multiple reasons to enter into this type of leasing contract. One is the ability to develop a customized facility to precisely meet needs, with a layout tailored to the company's unique business model. This can be valuable in the long term, especially when contrasted with the alternative of trying to lease a generic building.

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Another reason for the tenant to lease under a "build-to-suit" contract is because it doesn't have to use its own capital. By allowing… Read More …