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The Advantages of White Box Delivery in Leasing Your Space

[fa icon="calendar"] 01.17.2017 / by Hunter Strickland

 

One of the biggest causes of conflict after a commercial lease is signed is the confusion of who is responsible for construction and improvements. This can be easily avoided, though, by using the proper terminology in your lease. In a lot of cases, both tenants and landlords will agree that a white box delivery is the best option for both parties.

What Does “White Box” Mean?

White box (or vanilla box) means different things to different people. In most cases, it will refer to the interior condition of the space you are leasing - whether it be retail, industrial, office or any other type of commercial property - being delivered in a partially finished or unfinished condition. Generally speaking, the only improvements the landlord will provide will be limited to heating and cooling units, a dropped ceiling with white tiles, lighting, electrical, restrooms, ready-to-paint walls and a concrete floor.

This type of construction is often used for commercial owners who need to recruit a new tenant into their space as quickly as possible. The idea is that the tenant will be able to swiftly convert the space and use it for whatever purpose is needed.

Do I Need to Define "White Box" in My Lease?

Yes. You should always ask for a clear definition of “white box” or “vanilla box” in your lease. Leaving this out could lead to all kinds of confusion and possibly legal troubles down the road. While it may be generally understood what is meant by the term, there is a lot of room for misinterpretation. In some cases, leaving the interior walls, floor or ceiling unfinished can be costly for the tenant and will start the relationship off on a bad foot.

Since there is no universally accepted definition of “white box” or “vanilla box,” the landlord and the tenant will have to work together to agree on one. While some landlords think that excluding a definition in the lease gives them more flexibility, this is a risky decision. Both the landlord and tenant should always have the same or similar expectations when leasing a property.

What Are the Advantages of White Box Delivery?

Establishing a definition of “white box” delivery benefits both the tenant and the landlord. The landlord knows what they are obligated to deliver and when. The tenant knows what the landlord is going to deliver and in what condition so that they can plan accordingly. The tenant also benefits because they know when the work will be completed and if the space will be ready by the time they need it.

Everybody is a Winner

When negotiating a commercial lease, both parties need to have a full understanding of their construction obligations. This way the tenant knows what kinds of upgrades to expect and when, and the landlord does not pay for unnecessary improvements. Including a clear definition of “white box” or “vanilla box” makes everybody a winner.

11-things-to-look-for-when-leasing-commercial-property-in-florida

Topics: Leasing

Hunter Strickland

Written by Hunter Strickland

Hunter Strickland joined Demetree Real Estate Services in 2016, focusing on office and retail property leasing and sales. He works on our central Florida brokerage team along with several other seasoned brokers. Hunter has previous experience in commercial real estate, with a specialty in representing medical office clients.