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OnDemand Course

Lease Build Out Issues and Requirements

Learn about the key issues involved with build-to-suit leases.

Build-to-suit leases are attractive to tenants as they allow for maximum space efficiency as space is designed to meet the specifications and needs of the specific user, and can be designed to meet certain cost-efficient energy-saving elements and to meet future expansion needs. Also, the tenant can incorporate design elements to create the desired company image. However, the build-to-suit lease also has disadvantages: they are complex transactions which require careful allocation of risks and profits between the tenant and the developer/landlord. These deals are not quick to negotiate or document. The tenant will need to make a long-term commitment to the building in order to induce the landlord to structure the lease as a build-to-suit and the lender to finance the construction. Thus, the tenant must conduct thorough due diligence, not only with regard to the title and zoning of the property, but also the ability of the developer to complete construction of the building to the agreed-upon specifications and within the critical timeline. While in other leases, the building is already in place and any additional work which is necessary for the tenant's occupancy is mainly interior improvements (or will be performed by the tenant), in a build-to-suit lease the building is not yet constructed, or requires significant renovations to accommodate the particular tenant's use; or the landlord will be solely responsible for all interior improvements and the risks as to timing and cost. The parties are sometimes working from preliminary plans in negotiating the development of the space or the entire site. Tenants are typically desiring to occupy the space to meet a critical business strategy (for example, the addition or relocation of a distribution center to address logistics needs, or a new warehouse building to satisfy inventory storage requirements of a rapidly growing business), or to consolidate functions as a cost-saving measure. In either case, the timing of completion of the building to the correct specifications is critical. As a result, the parties need to clearly understand the factors which could affect the time line for construction, completion and occupancy. This topic will help professionals involved in build-to-suit transactions understand the key issues involved in build-to-suit leases, and address practical solutions to such issues to ensure that the lease is properly structured and the issues involved in the build-to-suit transaction are considered early in the negotiating process and adequately addressed in the lease and ancillary documents.

93 minutes
Course Exam
Certificate of Completion
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Agenda

Due Diligence Scope and Timing

  • Pre-Lease Execution
  • Post-Lease Execution/Condition to Obligations

Determining the Scope of Work and Managing Risk to Landlord From Changes to the Scope of Work

  • Negotiation of Scope of Landlord's Work and Any Work to Be Done by Tenant
  • Negotiation of Phased Work
  • Tenant Design Protocols/Criteria
  • Landlord - Managing Risk of Change Orders on Timing and Budgetary Overruns
  • Tenant - Maximum Flexibility in Obtaining Changes to Scope of Work

Timing

  • Interplay of Entitlement, Permitting and Plan Approval Timing
  • Timing for Delivery and Approval of Preliminary Site Plan (If Premises Is Undeveloped)
  • Timing for Delivery and Approval of Preliminary Architect's Plans to Final Approval and Construction Drawings
  • Management of Timing Risk to Landlord and Tenant.

Costs

  • Management of Risk of Cost Overruns
  • Maximum Tenant Allowances to Control Changes; Financing of Additional Tenant Allowances
  • Determination of Rent With Reference to Final Costs

Delivery of Completed Premises

  • Phased Delivery
  • Determination of Substantial Completion

Security for Completion of Building

  • Landlord Guaranty
  • Escrows

Post-Delivery Obligations

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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

Applications have not yet been submitted for Delaware, Idaho, Kentucky, Maine, New Hampshire, Ohio, Oklahoma, South Carolina, and Wyoming CLE for this course. However, if you are interested in obtaining CLE for any of the listed states or have any additional credit questions please email us at [email protected] or call us at 866-352-9540.

This course was last revised on July 24, 2019.

Call 1-866-352-9540 for further credit information.

  • AIA 1.5
     
  • Lorman Education Services is a registered provider of AIA-approved continuing education under Provider Number J2016. This course is approved for 1.5 Learning Unit hour(s). Prerequisite: None, Program Level: Intermediate: Advanced Preparation: None All registered AIA CES Providers must comply with the AIA Standards for Continuing Education Programs. Any questions or concerns about this provider or this learning program may be sent to AIA CES ([email protected] or (800) AIA 3837, Option 3). This learning program is registered with AIA CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product. AIA continuing education credit has been reviewed and approved by AIA CES. Learners must complete the entire learning program to receive continuing education credit. AIA continuing education Learning Units earned upon completion of this course will be reported to AIA CES for AIA members. Certificates of Completion for both AIA members and non-AIA members are available upon request.
     
  • AK CLE 1.5
     
  • Alaska attorneys may receive 1.5 hours of continuing legal education for completing this program. Please contact the Alaska Bar Association or go to www.alaskabar.org for details regarding reciprocity with other states.
     
  • AL CLE 1.5
     
  • This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.5 hours credit.
     
  • Arizona CLE 1.5
     
  • The Arizona State Bar does not pre-approve or pre-certify MCLE programs. However, records of this program and attendance will be maintained by Lorman Education Services for auditing purposes. This activity may qualify for up to 1.5 hours toward your annual CLE requirement for the State Bar of Arizona.
     
  • CA MCLE 1.5
     
  • Lorman Business Center, LLC. is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
     
  • CT CLE 1.5
     
  • Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.5 CLE credit(s).
     
  • GA CLE 1.5
     
  • This program has been approved by the Georgia Commission on Continuing Lawyer Competency for 1.5 CLE hours.
     
  • IL CLE 1.5
     
  • This course was approved for a total of 1.5 hours of MCLE Credit by the Illinois MCLE Board.
     
  • IN CLE 1.5
     
  • This program has been approved by the Indiana Commission on Continuing Legal Education. Participating attorneys are eligible to receive up to 1.5 hours of Distance Education credit.
     
  • MO CLE 1.8
     
  • This course qualifies for self-study CLE credit in Missouri.
     
  • MS CLE 1.5
     
  • This program has been approved by the Mississippi Commission on Continuing Legal Education for a maximum of 1.5 credit hours.
     
  • NJ CLE 1.8
     
  • This program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 1.8 hours of total CLE credit.
     
  • NM CLE 1.5
     
  • This program has been approved by the New Mexico Minimum Continuing Legal Education Board for 1.5 hours of credit.
     
  • NY CLE 1.5 including Areas of Professional Practice 1.5
     
  • This course has been approved in accordance with the requirements of the New York Continuing Legal Education Board for up to a maximum of 1.5 credit hours in the area(s) of Areas of Professional Practice for 1.50 hours. Each hour may be counted only as satisfying one category of credit. Duplicate credit for the same hour of instruction is not permitted. This course qualifies for both established and newly admitted attorneys. Lorman Business Center, LLC. has a financial hardship guideline. Please contact customer service at 1.866.352.9539 for instructions on how to apply.
     
  • PA CLE 1.5
     
  • This Distance Learning program has been approved by the Pennsylvania Continuing Legal Education Board for 1.5 hours of substantive law, practice and procedure CLE credit.
     
  • RI CLE 1.5
     
  • This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 1.5 hours of CLE credit.
     
  • VT CLE 1.5
     
  • This self-study program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.5 hour(s) of CLE credit. Please note: Attorneys may only claim 12 credits per compliance period in this format. This course is considered "Non-Moderated Programming without Interactivity".
     
  • WA CLE 1.5
     
  • This program has been approved by the Washington State Board of Continuing Legal Education for 1.5 hours of A/V credit under the Law & Legal Procedure category.
     
  • WV MCLE 1.8
     
  • This program has been approved by the West Virginia State Bar MCLE Commission for 1.8 MCLE hours.
     
The CLE Code is ONLY a requirement when applying for CLE Credit in New York. Other states do not need to supply the CLE Code to apply for CLE credit.

To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.

  • Those applying for AIA and HRCI must view 100% of the program and answer the questions following the program.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Gale G. Evans

Gale G. Evans

Seyfarth Shaw

  • Partner in the Atlanta office of Seyfarth Shaw LLP with over 20 years of experience as a commercial real estate attorney
  • National practice advising Fortune 500 companies and regional developers on all aspects of leasing, acquisition, development and disposition of industrial, office and retail properties
  • Lectures on a number of commercial real estate leasing topics
  • Member of State Bar of Georgia, Commercial Real Estate Women, and International Council of Shopping Centers
  • J.D. degree, University of Georgia School of Law; B.A. degree, Emory University
  • Can be contacted at [email protected] or 404-885-6716
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 402147
Published 2019
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