Project Management Teams Deliver Big Value for Tenants
The current development market is challenging, but for companies on a lease, a landlord’s dedicated project management team may provide an answer
There’s no question that the current real estate development market is challenging. Labor shortages and rising material costs are creating hurdles in the construction industry, which is being compounded by limited inventory of vacant real estate for certain property types, leaving companies with very few options for additional square footage or property upgrades.
The good news is that companies that lease their building may be in luck thanks to a high-value service some landlords are offering: a dedicated project management team. Project management teams come in all shapes and sizes, but they have the potential to handle all types of development projects (e.g., expansions, renovations and build-to-suits) as well as deliver turnkey solutions. REITs and other longer-term investors will often invest in these teams, priding themselves on being a partner to their tenants for the duration of the lease and beyond.
Project management teams manage everything from conceptual planning to design to construction management, assembling a team of architects, consultants and contractors. This holistic service is particularly valuable since most tenants don’t have the resources—be it the capital, relationships or expertise—to execute these projects themselves. And leveraging their landlord’s project management team is often more efficient and cost-effective than hiring a third-party developer, and enables them to focus on their core business, which is most likely not real estate development.
In today’s market, having access to a dedicated project management team with a shared interest in their tenant’s business and the expertise to effectively navigate current challenges is more valuable than ever. Here’s why:
Renovate, modernize or convert an existing building
Project management teams can adapt an existing building to reflect the tenant’s evolving real estate needs. This could encompass a full renovation and modernization of an outdated building or converting one property type to another (e.g., office to R&D) to reflect a changing business model. Moreover, with prices continuing to increase having a project management partner that can finance the upfront costs associated with these projects is critical. In addition, working with a project management team that understands the ins and outs of a tenant’s business along with being able to offer a tailored approach means the final product will be ideally suited to the tenant’s long-term needs, in comparison to if the tenant worked with a third-party developer.
Expand an asset to accommodate a need for more space
In order to continue growing, many tenants need to expand their real estate footprint to make room for more equipment, inventory and more. However, record-low availability of real estate means that many tenants can’t find the additional space they need. An in-house project management team can help by working with tenants to expand their existing space to accommodate growing business needs. A huge benefit of this approach is that tenants can typically continue operating in their existing facilities during an expansion, offering minimal disruption to day-to-day operations.
Retrofit an existing space to make it more sustainable
With energy costs continuing to soar, there’s never been a better time for tenants to update their properties to make them more sustainable. In-house project management teams can work on a variety of sustainability projects including renewable energy opportunities – such as solar panel installations – energy efficiency retrofits and green building certifications. These sustainable projects can reduce tenants operating costs and help reduce scope 1 and 2 emissions to align with their sustainability goals.
Conclusion
For landlords, investing in a project management team is a win-win. Turnkey project management solutions add value for tenants by adapting their property to meet their long-term needs, helping increase lease renewals while also improving the overall quality of the portfolio. From an investment perspective, having a project management team also provides a steady pipeline of attractive internal investment opportunities, while enabling the landlord to have project oversight on deals where they are also serving as the capital provider.
Related Topics:
You May Also Like:
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.
Net Lease Retail Continues To Surge
Net lease retail continues to attract investors seeking stability, long-term income, and defensive retail plays, and market momentum should remain strong into next year, experts say. GlobeSt spoke with Michael Fitzgerald, Head of U.S. Retail Investments for W. P. Carey, at this year's ICSC Las Vegas conference to discuss which retail categories are strongest, why sale-leasebacks continue to dominate the landscape and why he remains bullish on net lease retail. In this video, you'll hear: Which retail categories are the strongest in the current market What's driving the growth of sale-leaseback transactions How the net lease market will perform in 2027 Watch now An interview with Michael Fitzgerald, W. P. Carey, and Holly Amaya, GlobeSt.com.
Net Lease Retail Demand Follows Where Retailers Are Growing
The US net lease market is experiencing a resurgence. Valuations reset throughout 2025, meaning the bid-ask spread narrowed. And in spite of economic headwinds, net lease volumes increased by 24% year-over-year for the fiscal year ending in Q3 2025, according to CBRE. For Michael Fitzgerald, managing director and head of US retail at W. P. Carey, finding the right retail investment opportunity starts with understanding some tell-tale signals. “The US net lease retail environment is driven primarily by the general health of retailers,” says Fitzgerald. “Are there a large number of retail operators that are opening new locations or investing in existing locations in a way where they need access to capital?” When the answer to that question is yes, deal flow often follows, and Fitzgerald points to specific categories where he sees the strongest deal flow and investor interest right now. Non-discretionary Categories Draw Investor Interest Fitzgerald notes that retailers that sell non-discretionary products or services are among the most interesting for investors, but tend to carry lower cap rates. “We also think about the macro trends, such as fitness,” says Fitzgerald. “It used to be something that a small percentage of the population would pay for; now it’s become a non-discretionary spend for a lot of families because general health and fitness have become a priority.” He notes that convenience stores, car washes and automotive services are among the other segments he sees generating strong deal flow, with car washes having regained interest and automotive services drawing attention across the board. Full Loan-to-Value Appeal Drives Demand For business operators or CFOs seeking efficient forms of capital, Fitzgerald explains that the net lease structure is hard to beat. “They can redeploy that capital back into their businesses at a higher return because they’re getting more loan-to-value than a mortgage,” says Fitzgerald. “That’s why we see sale-leasebacks continuing to be one of the top choices for businesses that have an ongoing need for capital.” When evaluating a net lease retail asset, Fitzgerald explains that the analysis centers on whether a location can generate enough cash flow to cover rent easily across a commitment that can run for 20 years or more. He also notes that new stores can complicate that picture since there is no operating history to draw from, which is why assets with longer track records tend to be the easiest to understand and underwrite. Net Lease Retail Holds Up Across Good Economies and Bad Despite continued headlines about retailer store closures, Fitzgerald notes that the net lease retail market is more durable than the news cycle suggests. He explains that the net lease market has proved resilient across good and bad economies, with the most difficult periods coming not from downturns but from rapid interest rate swings in either direction. “I’m optimistic about the net lease retail market. Even in times of relative instability, we continue to see consistent deal flow, as companies leverage sale-leaseback transactions to monetize real estate and fund growth,” says Fitzgerald.