You may have heard the term white boxing in commercial real estate, but what does it actually mean? For businesses looking to relocate into new premises, white boxing is when you find the ideal space, but it’s quite literally a white shell.
What do we mean by shell? Well, just that. It has basic white walls, floors, and ceilings. While it may seem a bit strange, white boxing is a very common and universally accepted way of returning commercial real estate to a functional state ready for new tenants to customise to their specific needs once they move their business in.
What exactly is white boxing in commercial real estate?
White boxing involves taking a raw commercial space and fitting it out to a basic standard level of how it was before its current tenants had their business there. Getting it back to this basic level means that the following should be done:
- Finished walls that are usually plastered and painted in a neutral white.
- Basic flooring that is often a concrete slab that’s been levelled and prepared for the new tenant’s chosen floor coverings.
- A suspended ceiling or structural painted ceiling also in neutral white).
- Basic functional lighting that is often fluorescent or LED strip lighting. Fancy lighting and fittings can then be added once the new tenant is in.
- Essential electricals like basic power outlets and wiring, ready for connection.
- Basic plumbing that will include connection points for water and drainage which are often capped off for the new tenant’s specific fit-out.
- Sometimes a basic, functional heating and cooling system, system is installed, or provisions are made for the tenant to install their own.
- Essential fire detection and suppression systems, adhering to local regulations.
What doesn’t white boxing include?
- Internal walls to create offices or meeting rooms.
- Specific flooring materials (carpet, wood, tiles).
- Decorative lighting.
- Bespoke electrical installations for machinery.
- Kitchen and bathroom fittings beyond the connection points.
Again, it’s about providing a clean, safe, and functional shell that is move-in ready and waiting for new life from a whole new set of tenants.
Why is white boxing in commercial real estate important?
- Tenant flexibility: New tenants can create a space that perfectly aligns with their brand identity, operational needs, and employee specific needs. This customisation helps to create a personalised environment that reflects the culture of the business to both staff and clients.
- Landlord cost reduction: The initial investment for white boxing once a current tenant leaves is less expensive for landlords than fully fitting out a space speculatively. Landlords also don’t always know exactly what new tenants are looking for in their space, so creating a blank canvas is the best way to help them prepare the environment for change.
- Quick turnaround times: white boxing the space is a quick fix to providing new tenants with a clean and fresh environment. Landlords can quickly prepare a vacant unit for re-letting which goes a long way to helping them ensure a consistent income stream.
- A fresh space for lease negotiations: A clean space provides a defined baseline for lease negotiations in terms of roles and responsibilities and potential tenant improvement allowances.
The benefits of proper white boxing in commercial real estate
There are landlord and tenant obligations when it comes to white boxing, but when it is done properly, the benefits for both parties are significant.
For landlords:
- A white boxed space is more attractive to a wider pool of potential tenants.
- A clear definition of the base build minimises disagreements about the condition of the property.
- A well maintained and flexible space can command higher rental rates.
For tenants:
- Starting with a white boxed space can be more budget-friendly than having to undo a previous tenant’s extensive fit-out.
- Full control over the look and feel of the workspace.
- A properly prepared space allows for a smoother and faster fit-out process.
White boxing is a universally recognised concept in commercial real estate, and must be done properly to ensure that all specs are met and current tenants can leave, and landlords can start lease negotiations with confidence.
As an expert facilities management partner, FSG understands the importance of well-executed white boxing and our dedicated and experienced teams can support both landlords and tenants in navigating this crucial stage of the commercial property lifecycle with our range of services.
Contact us today and let us help you with your white boxing in commercial building maintenance needs promptly and professionally.
