BTS (build to suite) agreements

A build to suite agreement (BTS) makes it possible to adjust the space to the individual needs of the tenant. These days, it is a standard practice to prepare a space specifically for the tenant, providing offices with extra walls, glazing, open space, mezzanine, stairs, cloakroom, entertainment room, kitchen or canteen, and adjusting production and warehouse halls with an atypical height of rooms, cold, server and battery rooms or other rooms for specific devices. With a BTS agreement it is possible to make the best use of the leased space according to the needs and expectations of the tenant. This type of agreement also gives the landlord much more certainty as to the tenant's intentions, bearing in mind that a dedicated office, warehouse or production hall will not be changed every five years.

Contracts between the future tenant and the landlord are much more complicated, and their negotiations are much more demanding than ordinary lease agreements. Apart from ordinary provisions of a lease agreement, they also contain provisions regarding the design and construction stage, i.e. preparation of the facility for the needs of the tenant. The plan of such cooperation is often imposed by the landlord, who prepares a template of the contract.  

If you think of starting negotiations regarding the lease of production or warehouse space in the BTS formula, if you are in the process of doing so or have already concluded a lease agreement and need support with its proper implementation, we can help you in the following areas:

1) identifying and minimizing the potential risk, e.g. we can help establish the rules for the use of specific areas, such as cold rooms, sorting plants or production halls;

2) preparing and negotiating the terms of the contract with an architecture studio;

3) negotiating preliminary commercial terms of the contract and accepting the offer or signing preliminary documents such as a letter of intent or a head of terms;

4) negotiating the terms of the lease agreement in the BTS formula, including in particular:

• conditions regarding the expenditures (space arrangement) and participation in the related costs, responsibility for the proper adaptation of the space to the needs of the lessee,
• responsibility for the design and tenant's guidelines at the construction stage,
• delivery of the space with particular emphasis on the procedures for reporting and repairing defects,
• the terms and conditions of paying the rent and the so-called service charges, including rent-free periods and indexation rules,
• verification of payment security (e.g. bank / insurance guarantees, deposit / surety of the parent company),
• the scope of the lessee’s obligations, including the responsibility for the proper maintenance of the space,
• the right of early termination or withdrawal from the contract,
• assignment of rights under the agreement and sublease rights,
• rules for settling expenditures after the end of the lease period;

5) analysis of the already concluded lease agreement regarding its proper implementation or its potential termination;

6) negotiating annexes to already concluded lease agreements.