12 questions every corporate user should ask a build-to-suit developer before signing an LOI

The LOI moment is the highest-leverage point in an industrial build-to-suit. Everything written into the LOI either locks in or quietly disappears once construction has started and the project is twenty months from delivery. The questions a corporate user asks before signing are the questions that protect the next two years of their operations plan.

The questions below are the ones we wish more corporate users asked us. Not because the answers favor us specifically, but because the answers are how you know who actually knows how to deliver a build-to-suit, and who is going to hand the hard parts off to someone else halfway through.

A note on how to use this list. None of these are gotchas. A good developer will answer all twelve openly, in some cases with hedged or qualified answers, because the honest answer on a build-to-suit is sometimes “it depends” or “we lost months on that one project, here’s why.” The disqualifying answers are the ones that are evasive, or the ones that contradict the reference checks you do later.

1. How many build-to-suits have you actually delivered, and at what sizes?

The right answer is a specific list, with names, addresses, square footages, and tenants where the tenants are public. A developer with five completed industrial build-to-suits has the relationships and the playbook. A developer with one has the willingness. A developer with zero has the marketing. Pay attention to the size distribution: a firm that has delivered four 80,000-square-foot flex buildings is not the same firm as one that has delivered a 600,000-square-foot bulk facility. Scale changes the pricing exercise, the financing structure, the GC relationship, and the entitlement profile.

2. Who owns the building at completion, and what ownership structures have you used in the past?

The default in most industrial BTS deals is that the developer owns the building and the corporate user signs a long-term triple-net lease. That is not the only structure. Build-to-suit-to-purchase, ground lease structures where the corporate user owns the building but not the land, and sale-leaseback at delivery are all common. The right answer to this question is a description of the structures the developer has actually closed on, not a theoretical overview. If you want to control the asset at completion, you need to know on day one whether the developer is comfortable with that path or wants to talk you out of it.

3. What is your site selection process, and how long does it typically take?

A real site selection process is two to twelve weeks of work, depending on the geography and the constraints. The developer should be able to describe the criteria they apply, the universe of parcels they’re going to look at, the diligence they run before recommending one, and the markets they know well enough to make a recommendation in. Vagueness here is a warning sign. “We’ll find you a great site” is not a process. “We’ll pull the industrial inventory in Kentwood, Walker, Cascade, and Wyoming, run a screen against your trailer-and-truck-court requirement and your power needs, and have three to five candidates with Phase I diligence in four weeks” is a process.

4. Which incentives have you actually secured at past projects, and what is your win rate on applications?

Incentive structuring is core to industrial development math in Michigan, and the firms that actually know how to do it can name the specific programs they’ve layered into past projects: IFT abatements under Public Act 198, Brownfield TIF on contaminated or functionally obsolete sites, MEDC performance grants on projects with measurable job and investment commitments. The honest answer includes the ones that didn’t get approved and why. A firm that has never lost an application has either never applied or is shading the answer. For a fuller breakdown of how the Michigan incentive stack works, see our guide to industrial incentives in 2026.

5. Do you self-perform construction or partner with a GC, and how is the GC selected?

Most industrial developers do not self-perform. The question matters because the GC selection model varies, and the model determines a lot about how the project goes. Some developers competitively bid every project. Some have a single GC relationship they default to. Some maintain a short list of two or three GCs they rotate through based on size, complexity, and current capacity. The right answer is the one the developer can defend on this specific project. We’ve worked with Pioneer Construction on most of our larger projects in Grand Rapids because that relationship lets us run an iterative pricing exercise on a building that will be designed and re-priced three or four times before the GMP locks in.

6. What goes wrong on industrial build-to-suits, and how do you handle it?

The wrong answer is “nothing has gone wrong.” The right answer is specific: an environmental surprise at Phase II that added scope, an entitlement continuance that slipped the schedule, a tenant change order during construction that re-opened pricing, a labor shortage in a specific trade that compressed the GC’s schedule. The follow-on question is how the developer absorbed the problem: contingency used, schedule recovered, who paid for what, what got renegotiated. The willingness to talk about real problems is one of the best signals of someone who has actually delivered projects.

7. Who from your firm is on the project day to day, and at what management level?

On a meaningful industrial project, the developer’s day-to-day involvement matters more than the org chart suggests. The right answer is the specific names of the people who will be on the calls, in the design meetings, at the city, and in front of the lender, with a clear description of their seniority and authority to make decisions. A project where the principal is on the pitch but disappears into the marketing materials after signing is a project that’s going to cost you in friction every week. The principals at Third Coast are on every project, on every call with the lender, and in front of the city. That isn’t a marketing claim; it’s how we structure the firm.

8. How do you handle scope changes after construction starts?

Scope change happens on every industrial BTS, because the tenant’s operations team learns something during the design and construction process that they didn’t know at LOI. The mature developer’s answer describes a change-order process: pricing turnaround time, schedule impact analysis, sign-off authority, and how the cost is treated against contingency, against rent, or against the GMP. The amateur’s answer is some version of “we’ll figure it out as we go.” Figuring it out as you go is how a project ends up sixty days late and three hundred thousand dollars over.

9. What does your warranty and post-occupancy support look like?

CO is not the end of the developer’s relationship with the building. The building’s roof, structural envelope, HVAC, electrical, and dock systems all carry warranties from the GC and from manufacturers, and the developer is the one who fields the call when something fails in the first 18 months. The right answer describes the warranty period, the GC’s punch list and warranty walkthrough process, and the developer’s role as the intermediary between the tenant and the GC after delivery. A developer who treats CO as a handoff and walks away is a developer the tenant will be unhappy with the first time something goes wrong.

10. Have you ever walked away from a project, and why?

The right answer is yes, with a specific story. Site that didn’t pencil. Entitlement environment that turned hostile. Tenant requirement that the firm couldn’t deliver competitively. A developer who has never walked away has either delivered only a handful of projects or has taken on projects they should have declined and absorbed the damage. The willingness to walk is one of the better signals of a firm that has internal discipline about which projects to pursue. The corollary is that the projects they do pursue are the ones they actually believe in.

11. Who would you suggest I talk to from a past client?

A real reference list includes the tenant operations leader, not just the broker who originated the deal. The tenant’s operations leader has lived in the building for eighteen months. They know what the developer was like when something went wrong on a Friday afternoon and the roof was still leaking. That is the conversation that tells you what you actually need to know. If the developer’s preferred reference is the broker who sourced the deal, ask for the operations contact too. A firm with nothing to hide will provide both.

12. What is the structure of the cost-plus or GMP contract you would propose on this project?

The two dominant contract structures on industrial BTS are cost-plus (with or without a fee cap) and GMP (guaranteed maximum price). Each has tradeoffs around price certainty, change-order treatment, and the developer’s incentive alignment. The right answer is a clear description of the contract type the developer would propose for this specific project, why that structure fits this scope and risk profile, and how the savings or overruns are split if the project comes in under or over GMP. A developer who can’t articulate the contract structure on day one is not the developer who is going to negotiate it well at GMP lock-in.

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The checklist isn’t an interrogation. The point isn’t to grill the developer until they break. The point is that the answers to these twelve questions are how you know, before signing the LOI, whether the firm you’re talking to has actually done this work before, whether they’re going to be honest with you when something hard happens, and whether the project you’re about to spend two years on is going to end the way both sides hope.

If you’re scoping an industrial build-to-suit in West Michigan and want to walk through these questions with us, get in touch. And for the broader view of how we approach industrial development, see our industrial build-to-suit capability page.