In this article, you’ll learn:

• What long-term lease of a warehouse with an option to purchase entails.
• What are the financial differences between a lease with a purchase option, a traditional lease, and building your own facility.
• How the Build-to-Suit (BTS) model allows you to design a facility tailored to your specific technological processes.
• What the timeline looks like for transitioning from a lease to full ownership of the facility.

The growth of a manufacturing company often reaches a point where the existing facility becomes too small or no longer meets technological requirements. The entrepreneur then faces a strategic choice: should they lease a production facility or invest in their own facility? However, there is a third solution that combines the advantages of both models—a long-term lease of a facility with an option to purchase it later.

BTS Development offers a hybrid model combining BTS (Build-to-Suit) and BTO (Build-to-Own). Initially, the facility is designed and built to meet the specific needs of a particular company and is then operated under a long-term lease. After several years, the tenant is given the option to purchase the property and transition from the BTS model to the BTO model.

This solution combines the flexibility of leasing a production facility with the option of eventually owning the property.

First, BTS—a production facility designed for the company

The first stage involves carrying out the project under the Build-to-Suit (BTS) model. This means that the warehouse and production facility is built in accordance with the actual requirements of the future user.

It is possible to customize, among other things, the facility’s floor area and height, floor load-bearing capacity, the number of loading docks and gates from the “0” level, energy requirements, the layout of the production and warehouse areas, office and break-room space, and the appropriate number of parking spaces.

For more demanding production processes, the design can also incorporate customized technical solutions related to utilities, ventilation, heating, and the layout of production lines.

This is particularly important in manufacturing. The company does not have to adapt its production processes to a random, existing building. Instead, the production facility is designed specifically for the company’s processes.

An example of a flexible approach to space is BTS Park Świebodzin VI, where the warehouse and production facility was designed using a modular layout and can be adapted to various business models.

Why choose long-term leasing over building your own facility?

Building your own facility requires a significant capital investment right at the start of the project. Purchasing land, preparing documentation, and financing construction and technical infrastructure can limit the funds available for developing your core business.

In the hybrid model, BTS Development carries out the investment, while the business owner begins operations as a tenant. This allows the business owner to allocate capital toward production lines, machinery, automation, hiring more staff, product development, or expansion into new markets.

A long-term lease of the facility also ensures the stability of the location. This is particularly important in manufacturing, where relocating machinery, equipment, and the entire production process to another facility can be costly and logistically complex.

The company can thus grow its business in a facility tailored specifically to its needs, without having to commit the full capital required to purchase the property at the very beginning of the investment.

The table below shows the differences between a lease with an option to purchase, a traditional lease, and building the facility from scratch:

After several years of BTO – option to purchase the production facility

The most important element of the hybrid model is the ability to transition from BTS to BTO (Build-to-Own).

After several years of use, the company may decide to purchase the facility. The company is already familiar with the location and the actual costs of using the building, and knows whether the facility meets its long-term needs.

From a business perspective, this allows the company to spread out the investment decision over time. The company first expands its operations in a leased production facility and only later decides to purchase the property.

The process is simple:

BTS → long-term lease → business expansion → purchase option → BTO.

This is a significant advantage for companies that anticipate a long-term presence in a given location but, at the start of the investment, prefer to allocate capital primarily to production growth.

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Why does the BTS/BTO model work well for manufacturing companies?

The lease-to-own model is particularly attractive to growing manufacturing companies. For these companies, the location and technical specifications of the facility are often directly linked to production technology, staffing, suppliers, and long-term contracts.

Launching a new facility may require significant investments in machinery and production lines. Simultaneously financing the real estate further increases the scale of the project. The BTS/BTO model allows these two processes to be separated over time—first investing in production development, and then in the purchase of the facility.

A well-designed production facility for rent can thus be the first stage of a much longer-term investment. The company receives a facility tailored to its own operations but does not have to own the property from day one.

A facility that can grow alongside the company

Another key advantage of the BTS model is the ability to plan the facility with the company’s future growth in mind. When designing a modern production facility, one can account not only for the company’s current needs but also for potential increases in production, staffing, or warehouse space requirements.

This is particularly important for companies in a phase of dynamic growth. Instead of searching for a ready-made facility and adapting its processes to it, the company can participate from the very beginning in creating a space that aligns with its business strategy.

As a result, the investment can also be designed with future stages of development in mind—such as increasing production capacity, expanding warehouse facilities, or enlarging office and employee amenities. Long-term leasing of a production facility therefore does not have to limit a company’s potential but can become part of its long-term investment strategy.

BTS Development implements solutions of this type as part of its warehouse and production projects in western Poland, where BTS and BTO models are part of the offering for companies seeking space tailored to their individual needs.

Financial Flexibility and Growth Security

For a growing manufacturing company, it is crucial to maintain a balance between real estate investments and financing core operations. In the early years of a new facility’s operation, capital is often needed more for purchasing machinery, automating processes, expanding the workforce, or securing new contracts.

A production facility with a purchase option allows a company to postpone the decision to buy the property until it reaches a sufficient scale of operations. At the same time, from the very beginning, the company benefits from a facility tailored to its needs and can treat it as a long-term location for its operations.

This combines the flexibility typical of leasing with the prospect of building its own assets in the future.

Examples of Applications and Financial Benefits for Manufacturing Companies

Why does leasing a facility with an option to purchase work best in the manufacturing industry?

• Protection of working capital: Instead of spending millions of zlotys on an equity contribution and construction work, the company invests its funds in modern production lines and automation.
• Flexibility during the growth phase: When designing a facility under the BTS model, it is possible to set aside land for future expansion of production or warehouse facilities (e.g., , the BTS Park Zielona Góra I and ).
• Tax Optimization: Lease payments are fully tax-deductible, which allows for tax optimization during the first years of a new facility’s operation.

BTS Development – From BTS Projects to Custom-Built Facilities

BTS Development specializes in the construction of warehouse, service, and manufacturing facilities tailored to the needs of specific companies. The hybrid BTS/BTO model expands this offering to include the option for the tenant to eventually acquire the property.

Examples of facilities developed by the company include not only the BTS Park Świebodzin VI warehouse and production facility but also the BTS Park Zielona Góra I project, designed for manufacturing, warehousing, and service operations.

The hybrid model allows for the combination of two seemingly conflicting needs: limiting capital expenditures at the start of the project and the possibility of owning one’s own production facility in the future.

For a growing manufacturing company, this may be the optimal path: first, a leased production facility tailored to the company’s specific requirements; then, several years of stable leasing and business growth; and in the next phase, the option to purchase the facility and transition from BTS to BTO.

The BTS/BTO model therefore allows you to view real estate not only from the perspective of the next few years, but as part of the company’s long-term development strategy.

Frequently Asked Questions

What is a lease with an option to purchase?

It is a long-term lease agreement in which the tenant uses a newly constructed facility (often under a BTS arrangement), while also having the guaranteed right to purchase the property outright after a specified period and under predetermined terms.

How does the BTS/BTO model differ from traditional real estate leasing?

Real estate leasing impacts creditworthiness from day one and requires completing complex banking procedures. A lease with an option to purchase allows you to start your business as a tenant (operating expense deductible for tax purposes), deferring the financial decision to purchase the property until the company reaches a sufficient scale.

When is it worth opting for a lease with an option to purchase?

This solution is ideal for growing manufacturing companies that need a custom-built facility (specialized installations, high power capacity, floor load-bearing capacity) but prefer to allocate their capital toward purchasing machinery, technology, and hiring staff, rather than tying up funds in real estate.

Is the buyout amount for the facility known in advance?

Yes, the terms and valuation mechanism—or the buyout amount for the facility—are precisely defined at the stage of signing the preliminary long-term lease agreement, ensuring full financial predictability.