Before you take possession of a retail space it is important to know how you want the space delivered. Usually in a hot retail market, landlords will deliver space in “As-Is, Where-Is” condition. Basically, this means that you are taking over the space the way the last tenant left it. Whether the retail center is new construction or existing, some landlords will deliver retail space in Vanilla Shell condition. There are many variations of a vanilla shell, but basically it means that the space has drywall on top of the studs, the mechanical systems are stubbed in and the lights in place. As mentioned, this can vary from region to region and landlord to landlord, but this is the general definition. Finally, there is a Cold Dark Shell delivery which is usually seen in new construction or a property that has been totally renovated. The Cold of Cold Dark Shell refers to the fact that the Heating Ventilation and Air Conditioning (HVAC) unit(s) is not there or not connected and distributed. The Dark refers to the lighting not being installed or in place.

It is important that you know what kind of delivery you can afford or need before signing a lease. In most cases, asking the landlord to deliver a warm lit vanilla shell results in a higher rent because the cost of doing the construction must be recaptured and it is usually through the rent.

In a future blog entry we will talk about how to get a loan from the landlord to help build out your space.