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What Is White Box Construction

What is White Box Construction

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27 views7 pages

What Is White Box Construction

What is White Box Construction

Uploaded by

alin alin
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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What is White Box Construction?

White box (also called a vanilla shell or warm shell), in commercial


construction and real estate parlance, is a partially finished commercial space
that a contractor delivers to the landlord or tenant.

The term “white box” comes from the look of a minimally finished space that
has white dropped ceiling and white sheet-rocked walls. It refers to a
commercial space’s condition before a tenant’s remodeling or finishes.

A white box is a commercial space that typically includes the following


provisions:

Exterior
The exterior shell includes a complete and finished structural system for the
building, a finished roof of the landlord’s design, and an entire rear wall,
usually of steel studs, drywall, or any material chosen by the landlord.

Interior
A white box has drywall tenant separation walls that are insulated and ready
for the tenants’ painting, a storefront door, windows, and concrete flooring.

Restroom
A white box can have one or two restroom/s as required by regulations,
complete with all American with Disabilities Act (ADA)-compliant accessories,
vinyl tile floors, and white drywalls. Doors have standard ADA hardware, door
closer, and a privacy lockset.

Electrical
A white box has a meter blank and disconnect in the building’s electrical room
and the following specifications:

 200 amp 120/208v, three-phase, four-wire service or as available from


the utility vendor
 Emergency lighting as required by the State Fire Marshal or as
regulated
 One or two standard duplex outlets of 110v
 Electrical for the restroom(s) exhaust fan, disconnect, and maintenance
outlet at the RTU, and one sign circuit for the tenant’s building front
signage.
 Conduits for phone, data, and cable service

Plumbing
A white box has all plumbing fixtures and connections for required restrooms,
a janitor’s sink, and a drinking fountain as required by code.

Heating, Ventilation, and Air Conditioning


(HVAC)
The landlord will install required air handlers for the RTU, main truck lines,
ductwork, distribution grilles, and diffusers.

Fire Suppression System


The landlord will install the required sprinkler system, and standard brass
heads turned upright to floor deck with maximum spacing in compliance with
the fire code.

A white box finish does not include the following:

 Interior walls finishing, painting or wallpaper (apart from restrooms)


 Plumbing fixtures (aside from drinking fountains and code required
restroom fixtures)
 Upgraded electrical fixtures
 Security systems
 Telephone, cable, and data wiring
 Modifications to the HVAC system layout

The clean lines and bare finish of a white box real estate appeal to tenants
who can easily see the potential of this partially-finished space. With a white
box finish, tenants can quickly convert the structure to anything they want,
customized to their business needs.

White Box vs. Grey Box


After understanding what provisions are included and excluded in a white box
build, it is time to define other commercial construction shell types.

Grey Box or Cold Shell


A grey box is a commercial space which is unfinished and has the following
characteristics:

 Unfinished floors
 Bare stud walls
 No plumbing and electrical works
 May include HVAC unit but without controls or ductwork
 May include a sprinkler system if required by code, but not dropped to
ceiling height
See Also: General Contractors vs. Construction Managers: Key
Differences

Warm Grey Box


The HVAC system required electrical and plumbing are in place in a warm
grey box. However, there is no permanent lighting.

Cold Grey Box


A cold grey box does not have a permanent HVAC. It does not have any finish
and is as bare as a shell as can be. Only perimeter walls and a roof are in
place.

Fully finished
A fully-finished commercial space has all of the finishes of the previous
tenant. It can also refer to a new commercial space built with finished flooring,
paint, ceiling, doors, and cabinetry. A white box shell offers tenants a nearly-
finished space for a faster move-in time while a grey shell requires more
finishing works to complete the structure. The finishing cost for a white box
shell can range between $5 and $20 per square foot. Meanwhile, a grey shell
can cost $30 to more than $100 per square foot to finish.

Advantages of White Box


Construction
Different tenants have different ideas of design, layout, and needs to suit their
business. Since it is difficult to predict the requirements of each tenant,
building a white box and leaving the finishing touches to them is a sensible
strategy.

Here are other benefits of constructing a white box structure:

 The flexibility of a white canvas gives tenants more room to create and
custom-fit the space based on their needs
 Cost savings from faster design and build process
 Lower cost for build-out since basic finishes are already in place
 Zero waste since there are no fittings for the tenants to remove or throw
away

How Much Does It Cost to “White


Box” a Commercial Space?
The cost to white box space will depend on the existing condition and size of
the area, the definitions, and scopes of work. The steps in building a white
box space typically include securing permits, demolition, and construction.

Securing Permits
It is necessary to identify which work scope will need to be permitted and to
what extent before performing any construction work. A demolition permit may
be required, with the cost dependent on the size of the demolition project.

The white box construction will require a full building permit for additional
scope of works that include:

 Lighting installation above what is required by code


 Installation of dropped ceilings
 Modification and relocation of sprinkler heads
 Expansion or relocation of the HVAC system
 Installation of drywall surrounding exterior walls
 Installation of dividers and demising wall to create smaller offices
 Installation of exit signs, as required by life safety code

A small-scale demolition permit can cost as much as $250. A full building


permit can cost more than $1,000. A permit expeditor may be needed in
securing a complete building permit and can cost more than $1,500 on top of
the permit cost.

Construction Costs
Here are the scopes of work needed to achieve a white box finish with their
corresponding estimated costs:

 Installation of the dropped ceiling with tiles – $3-5 per square foot
 Installation of drywall to subdivide the space – $5-10 per linear foot
 Concrete flooring – $3-5 per square foot
 Installation of HVAC units with controls, supply and return air systems –
$5-10 per square foot
 Installation of outlets, lighting, and electrical switches – $3-5 per square
foot
 Construction of restrooms, as per code – $5,000-10,000 per restroom
 Plumbing, electrical, and mechanical engineering services – $1.50 per
square foot
 Architectural services – $3 per square foot
 Project management services – 5% of managed costs
 Accessibility inspection charge – around $1,500 for inspection and plan
review (for projects that cost $50,000 and above)

Although the finished look of a white box project may look like a bare
minimum, the process of accomplishing this finish is meticulous. All provisions
must be compliant to the building code and ready for the tenant’s
improvements.

See Also: How To Hire The Right Texas Commercial Construction


Company

White Box Build-Outs


White box build-out means making the commercial space ready for
occupancy. It usually includes installation of lighting, flooring, interior walls
and dividers, and other furnishings. To complete a white box build-out, a
landlord may purchase materials for the tenants to install. Another option is to
offer a rent-free period for tenant construction without providing build-out
materials.

A landlord can also offer a tenant improvement allowance (TIA) to configure


and improve the space based on the tenant’s needs for white box build-out.
This allowance only covers works that are crucial in making the space
operational. However, it excludes costs for furniture, fixtures, and equipment
(FFE), paint or wallpaper, and other upgrades more related to the business
than the building or structure itself.

Usually, tenants shell out money for initial build-out costs. The landlord often
reimburses the TIA through progress payments for work completed or lump
sum payment at the end of the tenant’s construction. The TIA is usually
computed per square foot and expressed in total dollar sum. The landlord and
tenant finalize the amount during lease negotiations.

Finalizing the Lease Agreement


A lease agreement between the landlord and tenant must be negotiated and
executed before the completion of a white box build-out. Finalizing a lease
agreement ensures that the landlord does not pay for unnecessary or
unwanted improvements. Since landlords and tenants might have a different
interpretation of the contract, it must be detailed and thorough to avoid
confusion, additional expenses, and possible legal issues. Ensure that the
lease agreement specifies all the construction works. A legal consultation
may be necessary to ensure that all stipulations in the lease agreement are
clear and understood by the landlord and tenant, especially for long-term and
high-value leases.

Finding the Right Contractor for White


Box Construction
To accomplish a white box construction project, look for a reliable contractor
that will:

Help the client complete the plan design and


permitting requirements
They should have a licensed in-house architect or referrals of reputable ones
with full knowledge of plan and building code requirements. They should also
secure all the necessary permits before the start of construction.

Provide a detailed and comprehensive cost


estimate with a breakdown of line items
The contractor should provide a cost estimate that covers all scopes of work
for completion. There should be no hidden costs and charges. The contractor
should fully inform the client if there are any adjustments or changes.

Ensure fast turnaround


The contractor should outline and follow a step-by-step construction project
schedule. The contractor should ensure that all the project steps are carried
out on time and minimize delays. They should maintain consistent
communication with the client, give quick responses, and deliver a fast
turnaround while maintaining a high standard of construction.

Final Thoughts
Given the construction expenses, why would a landlord opt to deliver a
commercial space in a white box condition? White box construction is for
commercial space owners who need to add a new tenant to their property
immediately. A white box finish allows the tenant to customize improvements
and finishes to suit their business needs.

With a white box finish, tenants can quickly convert the space to their desired
preferences and specific requirements. White boxed space is also more
presentable to prospective clients, especially if it came from a rough and
unfinished status.

Potential tenants can visualize and plan their layout more efficiently. It would
be more convenient for clients to imagine how their FFE can fit within the
commercial space. A white box has advantages for potential tenants if they
are satisfied with the finishes. It makes their additional work to build-out space
minimal compared to a cold shell condition.

Overall, a white box space is quicker to lease out at a potentially longer-term


and higher rate than a commercial space in a cold shell or bare condition.

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