What You Need To Know About Vanilla Shells
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Commercial real estate can be delivered to a tenant in a variety of conditions. The condition
that a space is delivered in is classified by the amount of improvements and amenities
a space has prior to being leased. For example, grey shells or “cold dark shells”
are spaces without electrical, HVAC, restrooms, elevators, etc. It’s essentially a blank
canvas. The build-out for such spaces can be costly and may prolong the grand opening
of a tenant’s business in that space. But there are other shell space conditions.
Commercial properties can also be delivered as a vanilla shell, also known as “white-box
condition” or “warm shells.”
Vanilla Box Finish ________________
Think of a vanilla shell as a scoop of vanilla ice cream from an ice cream parlor – it’s
ready to eat, but it needs sprinkles, a little chocolate syrup, and whip cream to be complete.
Here is a list of improvements you can expect to be present in a space delivered as a vanilla
shell: * HVAC & ductwork
* Finished ceiling or drop ceiling * Lighting
* Finished restrooms * Elevators
A space delivered as a vanilla shell is almost the opposite of a cold dark shell – it’s
almost move-in ready, as they typically have the amenities to do so besides they tenant-specific
features. What Makes Vanilla Shells So Sweet?
Build-Out Time One of the most attractive features of a vanilla
shell is that the timeline of the buildout is significantly shorter than leasing a space
in any other condition. As I’m sure you guessed, this is because
most vanilla shells only need paint and tenant-specific amenities; thus, there is generally less work
to do during the build-out process unless the tenant’s business requires a heavily
customized space.
Build-Out Cost A big factor in deciding which commercial
space to choose is the costs that the space requires to suit your needs.
This is what makes vanilla shell leases are so desirable!
Along with a shorter build-out time, they also have a lower build-out cost. The reasoning
behind the lower build-out cost compared to other leases is the same reason why the build-out
period is usually shorter: the space has many of the amenities needed to be move-in ready.
Location Vanilla shells are the most common type of
delivery for a commercial lease. You can find them in every area of your city
in contrast to cold dark shells which are mostly found in prime locations.
Why Would You Want A Vanilla Shell? ________________
Timing and your budget are key metrics to take into account when deciding on whether
to go with a vanilla shell lease. If you’re not willing to spend a lot of
up-front costs in comparison to a cold dark shell, then a vanilla shell lease is for you.
Also, if you’re not looking to spend a lot of time on a build-out, then you need a vanilla
shell lease. The not so sweet part about vanilla shell
leases is that the rent rate tends to be higher than other delivery options. This justifies
the costs that the landlord incurs when making the space warm vanilla shell condition. But
since you don’t have to pay as much in up-front costs, this should not be too much of
a concern.