Build-to-Suit or Existing Product: The Framework Occupiers Skip
What I am seeing across the Western U.S. industrial market right now is a quiet but meaningful shift in how serious occupiers are evaluating their next move. The conversation used to start with what is available. Increasingly, it starts with what is actually needed.
Build-to-suit interest is rising. Not because spec product has disappeared. Because more occupiers are realizing that the space they sign on for in the next 18 months will define how their operation performs for the next decade. That is not a leasing decision. That is a long-range operating decision.
The timing of these decisions also matters more than it has in several years. Cushman & Wakefield's recent Waypoint research shows that tenant-favorable conditions across the Americas, currently at 53% of markets, are projected to contract to 19% by 2029, while landlord-favorable conditions are expected to rise from 17% to 46% in the same period. The leverage window occupiers have today is not permanent. It is closing.
And the decisions made inside it deserve a real framework.
Most companies arrive at the build-to-suit versus existing product question already leaning one direction. They have either heard build-to-suit is too expensive or too slow, or they have decided that no existing building meets their requirements without ever pressure-testing that assumption. Both shortcuts produce poor outcomes. The right answer is not a preference. It is a structured comparison across five operating variables, run before a single building is toured.
Here is the framework we use in serious advisory engagements.
1. Timeline Reality
Build-to-suit delivery across the Western U.S. typically runs 12 to 24 months from site control to certificate of occupancy. The variance is driven by submarket fundamentals: entitlement complexity, utility coordination, and permitting cycles. In jurisdictions with longer entitlement timelines or constrained utility capacity, deliveries push toward the upper end of that range. In submarkets with streamlined entitlements and existing utility infrastructure, including Northern Nevada, well-positioned projects can deliver in 12 to 18 months. That difference is not a detail. For an occupier with an operational deadline inside two years, it can determine whether build-to-suit is even on the table.
Existing product, by contrast, can move from LOI to occupancy in 60 to 120 days for a standard configuration. Even with significant tenant improvements, the timeline rarely exceeds 9 months.
This is the variable that disqualifies build-to-suit before any other consideration. If the operational deadline is inside twelve months, existing product is the only path. Full stop. The framework still applies to the rest of the decision, but the timeline reality sets the boundary.
What occupiers consistently underestimate is how early they need to make this call. A 24 month delivery window means the build-to-suit decision needs to be made roughly thirty months before the operational deadline, accounting for site selection, entitlement risk, and design. The companies that secure favorable build-to-suit outcomes are the ones who started thinking about the question two and a half to three years out.
That horizon matters more right now than it has in several years. C&W research projects rental increases across 55% of Americas industrial markets over the next three years. The economics of waiting are shifting. Occupiers who delay the decision are not just losing optionality. They are likely entering a different market when they finally move.
2. Operational Specificity
The second variable is the one most occupiers misjudge.
Standard industrial product, 36’ clear, 50’x50’ column spacing, conventional dock loading, ESFR sprinkler, works for most distribution and light manufacturing operations. The market builds this product because most users need this product.
Where existing product begins to fail occupiers is at the operational specificity threshold. Specialty cold storage, heavy electrical loads required for automation or advanced manufacturing, oversized clear heights, drive-through configurations, rail access, hazardous materials handling, food-grade requirements, and floor flatness specifications for robotics all push a building outside what spec developers will deliver to an open market.
The decision logic here is straightforward. If the operation can run efficiently in a standard configuration, existing product almost always wins on time, capital, and flexibility. If the operation requires meaningful customization, the conversation changes. The cost of retrofitting an existing building to meet specialized requirements often approaches or exceeds the premium of a purpose-built facility, with worse long-term performance.
The question to answer here is not whether the building can house the operation. It is whether the building will let the operation run the way it needs to run for the full lease term.
3. Capital Structure
The third variable is where the financial comparison gets misread most often.
A build-to-suit typically requires a longer lease term, often 10 to 15 years, with higher base rent reflecting the developer's purpose-built capital investment. Existing product runs shorter, typically five to ten years, with a lower starting rate that reflects a building already in the market.
The reflexive read is that existing product is cheaper. That is not always true on a total occupancy cost basis. Recent C&W research illustrates the point. Across the Americas in 2025, industrial rents rose 2.8%, wages rose 2.0%, and electricity costs rose 8.3%. The cost components of running a logistics or production facility are moving in different directions at different speeds. The headline rate captures one. It misses the others.
When we model these decisions for clients, the inputs include base rent, operating expense exposure, tenant improvement allowance, free rent concessions, expansion premiums, holdover risk, and the productivity cost of operating in a building that does not fit the operation. The methodology we run captures the full economic picture, not just the headline rate.
In some scenarios, particularly for operations with high labor or equipment intensity, a purpose-built facility with a higher base rent produces better total economics because the operation runs more efficiently inside it. In other scenarios, particularly for shorter-term or more flexible operations, existing product wins decisively because the lower capital commitment preserves optionality.
What matters is running the comparison. Not assuming the answer.
4. Market Depth
The fourth variable is structural, and it changes the calculus depending on where the occupier is operating.
In a deep market, defined as one with multiple viable existing options at the target size and specification, the build-to-suit premium is harder to justify. Competitive supply forces existing rates down. Spec developers deliver buildings that meet most operational needs. The occupier has leverage.
In a thin market, defined as one with limited options at the required size, specification, or location, the calculus inverts. When the existing inventory cannot deliver what the operation needs, build-to-suit becomes the only path to operational fit. The premium is no longer a premium. It is the cost of getting the right building.
Market depth is a function of size, but it is increasingly a function of use case. A 100,000 sf occupier with standard distribution requirements will almost always find existing alternatives in a primary Western market. A 500,000 sf bulk distribution user with specialized handling needs may find none. And a mid-size advanced manufacturing occupier, or a tenant building out for AI-driven operations with the power, cooling, and floor specifications those workloads require, often finds the existing inventory cannot deliver any of it, regardless of the broader market's depth. Site selection methodology has to account for all three. The same occupier evaluating the same decision across two different markets can reach two different conclusions, and both can be correct.
5. Optionality Cost
The fifth variable is the one occupiers think about least and pay for most.
A build-to-suit locks an operation into a specific building, in a specific location, for a long term. The flexibility cost is real. Operations change. Markets shift. What looks like the perfect facility today may be a constraint in year eight.
Existing product preserves optionality. Shorter terms, market-rate renewal options, the ability to relocate without stranded capital. That flexibility has a price, paid in operational fit compromises and shorter planning horizons. But for operations with uncertain growth trajectories, business model evolution, or exposure to volatile demand, the flexibility is worth the compromise.
The question to answer here is not which path is more flexible. It is what flexibility is actually worth to the business. For some operations, the answer is significant. For others, the answer is close to zero because the operation is structurally stable and the building requirements will not change.
That answer is a board-level conversation. Not a brokerage conversation.
The Framework Lives Before the Space Search
The reason most occupiers skip this framework is that it lives in a phase of the decision that most brokers do not work in.
The space search starts when a building is toured. The decision starts much earlier, in the underwriting of what the operation actually needs and what the business is willing to commit to. Running the five variables above is advisor work. It happens before the tour. It produces a defensible recommendation that a CFO, COO, or board can sign off on, not a list of buildings to walk through.
This is the work I care about most.
The decisions that compound over a decade, the ones that determine whether an operation runs efficiently or fights its building for ten years, are made in this earlier window. The companies that get this right have someone in the room who understands their operation, models the full economics, and brings the structural rigor of a global firm's methodology to a decision that gets one chance to be made well.
That is the advisor relationship worth having. Not the one that starts with a tour. The one that starts with the framework.
Amanda Eastwick, SIOR, CCIM is a Director at Cushman & Wakefield and West Coast Industrial Advisor specializing in occupier strategy, site selection, and lease negotiation across the Western U.S. She is the Founder and President of WILD, Women in Industrial, Logistics & Development.
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