What is a Build-to-Suit for Automotive Dealerships?
A build-to-suit (BTS) is a strategic real estate solution for automotive dealerships looking to establish a new location or expand their current footprint without the heavy upfront capital investment. In this model, a developer or investor finances and manages the construction of a new dealership facility tailored to the dealer’s specifications. Once complete, the dealership enters into a long-term lease agreement, similar to a sale-leaseback.
For dealers seeking a modern, purpose-built facility, a build-to-suit offers an efficient and cost-effective alternative to purchasing land and managing construction or retrofitting an existing building.
Key Benefits of a Build-to-Suit for Dealerships:
Custom-Designed Dealership – Facilities are built to OEM brand standards and operational needs.
No Upfront Capital Investment – Dealers can preserve capital for inventory, marketing, and expansion.
Operational Control – The dealership maintains full operational control after construction.
Scalability & Future Growth – Options for expansion, renovations, or energy-efficient upgrades with investor support.
Optimal Location – Choose high-visibility, high-traffic locations to maximize customer accessibility.
Who Should Consider a Build-to-Suit?
A build-to-suit is ideal for auto dealerships that:
Require a customized facility to meet brand and operational requirements.
Prefer a newly constructed property instead of retrofitting an older building.
Want to preserve working capital instead of tying up funds in real estate development.
Can commit to a long-term lease (typically 10-30 years).
How Does the Build-to-Suit Process Work?
Automotive dealerships can pursue a build-to-suit through several approaches:
Developer-Led Build-to-Suit
The dealership works with a commercial developer to design and construct the facility.
The developer handles land acquisition, zoning, and construction risks.
Upon completion, the dealership enters a long-term lease with the investor or developer.
Reverse Build-to-Suit / Sale-Leaseback
The dealership acquires the land, arranges financing, and oversees construction.
Upon completion, an investor purchases the property, allowing the dealership to recoup capital.
The dealership then leases back the facility, ensuring financial flexibility.
Investor-Led Build-to-Suit
The dealership works directly with an investment partner for site selection, financing, and construction.
The investor handles the entire development process, delivering a turnkey dealership.
Upon completion, the dealership leases the facility without an upfront capital burden.
How Long Does a Build-to-Suit Take?
The build-to-suit timeline varies based on dealership size, location, zoning approvals, and design complexity. Generally, projects take 12-36 months from site selection to completion. Rent payments typically begin only after the facility is operational, and lease terms generally range from 10 to 30 years.
Is a Build-to-Suit Right for Your Dealership?
For automotive dealers looking to expand or relocate, a build-to-suit offers a custom-tailored facility without the capital constraints of direct ownership. Whether through developer-led construction, sale-leaseback, or investor-backed financing, this approach enables dealerships to grow strategically while maintaining financial flexibility.
Pointe Automotive specializes in structuring build-to-suit financing solutions tailored to auto dealerships. Contact us to explore how a build-to-suit can help drive your dealership’s growth while keeping capital available for your core business operations.