Making regular property improvements is important to your bottom line as a manager or owner. Read on to learn more about how property improvements can increase your revenue and reduce tenant turnover.
White Box Construction: What You Need to Know
As a business owner looking for new rental space for your commercial business, you will most likely hear the term “white box construction” quite frequently during the discussion of new construction. But what exactly is white box construction?
What Is White Box Construction?
Now, we should first tell you what white box construction is before you ask, “Who would rent an unfinished piece of property?”
While a white box construction space isn’t ready for business on day one, it’s a blank canvas that provides a template for a wide range of possibilities. White box construction offers new tenants a space to build-out their space to fit their specific preferences and requirements while also helping to offset costs and allow them to enjoy the benefits of a customized space. While it is basic, a white box construction shell does create an interior space that is sheltered from the elements by a roof, ceiling, exterior walls, and concrete floors. It also has:
- Basic electrical wiring/outlets
- HVAC (Heating Ventilation and Air Conditioning)
Fire protection, hot water, restrooms, and drinking fountains may also be present, but it will mostly depend on the building or the property manager. While all of the exact details of a white box construction project can vary from market to market, you can be sure that all components of the space are up to code and ready for a new interior tenant build-out that is specific to your needs.
The Appeal of White Box Construction
In the construction world, white box construction is often used by real estate brokers and landlords to define the level of finish a space has prior to a tenant’s office remodel or tenant finish. This particular form of construction is typically reserved for commercial building owners who may need to make quick adjustments or accommodations to their property for a new tenant.
To put it simply, it commonly refers to a commercial building with an interior that is minimally or only partially finished with the idea that the new tenant will be provided with a shell space that they can quickly convert into anything they need. However, the term can sometimes have an imprecise definition depending on whom you ask.
Before Taking on Your First White Box Construction Project
While white box construction does provide tenants with a new space to customize and build-out however they please, there are a few things that should also be noted.
For starters, in a white box construction project, a designer generally had zero input on the commercial space so there will likely be no flooring aside from a concrete slab, very few interior walls (other than code required walls for restrooms), and very minimal/simple light fixtures. Another thing to consider when it comes to white box construction projects is lease agreements – this is not something we are experts on, but you can click here to learn more about lease agreements and white box (or vanilla box) construction.
Most white box construction projects do not allow for your space to be fully equipped for normal operations right from the start, and your lease agreement will essentially decide all of the necessary improvements that need to be made before you are able to claim occupancy.
Property managers will often offer a tenant improvement allowance to offset the costs of improvements, but only towards improvements that are considered vital to making the space workable.
Things such as light fixtures, furniture, and paint may not be included as they are more related to tenant preferences, rather than the operation of the building as a work environment.
Property managers can have varying interpretations of contracts that may differ from yours so it will be important for you to make sure that your lease agreement is detailed and includes specific construction needs required to fulfill the terms of the lease you sign. You will want to be as thorough as possible to avoid confusion and possible legal issues down the road.
If you are ready to begin your white box construction project, contact our team at Camm Construction today!
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