Why Build-to-Suits Are Gaining Momentum in Today’s Market

As companies navigate an increasingly complex operating environment, one theme is becoming clear across the industrial and logistics sectors: flexibility and tailored real estate matter more than ever. Against this backdrop, build-to-suit development is gaining renewed momentum—emerging as a strategic solution for occupiers seeking custom real estate that aligns with their business needs.

A Market Defined by Constraints and Opportunity

Today’s market conditions are creating a natural tailwind for build-to-suit projects. In many logistics hubs, available space is limited, while demand for high-quality, well-located facilities remains strong. At the same time, elevated construction costs and shifting supply chains have slowed speculative development, further limiting available real estate.

For occupiers, existing real estate often falls short of increasingly complex operational requirements. Whether driven by automation, inventory optimization or last-mile delivery needs, companies are prioritizing facilities that are tailored to their business from day one.

Build-to-suits bridge this gap—offering a direct path to purpose-built space in markets where alternatives are limited.

The Shift to Purpose-Built Real Estate

The increase in demand for build-to-suits reflects a broader evolution in how companies view real estate. Rather than adapting operations to fit an existing building, occupiers are increasingly designing space around their workflows, equipment and long-term growth plans.

A build-to-suit is fundamentally a partnership model: a developer or capital provider funds and delivers a custom facility aligned with a company’s specifications, with the company entering into a long-term lease upon completion.

This approach has several key advantages:

• Customization: Facilities are custom-built for the tenant’s needs and designed to optimize layout from the outset
• Capital efficiency: Companies can preserve capital for core operations rather than investing in real estate
• Operational control: Tenants maintain operational control of the real estate
• Scalability: Properties can be designed with future expansion, sustainability improvements or evolving requirements in mind

In a market where efficiency and resilience are paramount, these benefits are becoming increasingly compelling.

Aligning Real Estate with Supply Chain Strategy

One of the most significant drivers behind the growth of build-to-suits is the transformation of global supply chains. Companies are rethinking their networks to improve resilience and proximity to end customers, placing greater importance on the role of real estate within their broader strategy.

As a result, modern logistics facilities are no longer just warehouses; they are highly specialized hubs incorporating automation, advanced power requirements, specialized layouts, sustainable features, and strategic proximity to population centers and key transportation routes.

As these requirements become more complex, custom build-to-suit development is increasingly the most effective—and sometimes only—option.

Momentum That’s Here to Stay

What began as a niche solution for highly specialized occupiers is becoming a mainstream approach across industries. From e-commerce and third-party logistics providers to manufacturers and retailers, a growing range of companies are turning to build-to-suits to meet their evolving real estate needs.

At W. P. Carey, we see this trend as a reflection of how occupiers increasingly value partnership. Through our Carey Tenant Solutions platform, we work alongside tenants to design, fund and deliver tailored real estate solutions that align with their operational goals. By combining deep expertise with a partnership-driven approach, we help companies turn real estate into a strategic advantage—built for today’s needs and adaptable for the future.