Vanilla Box: Means Many Things to Many People

Since there is no standard definition of “vanilla box,” the term has come to mean different things to different people.

Many people understand that a vanilla box means the “demised” or delineated space, where demising walls that separate space from common areas and other tenant spaces have been constructed. However, a vanilla box may or may not include utilities and the finished interior walls, ceiling, or floor. What a vanilla box actually comprises will depend on the specifics of the lease deal and the building/center involved.

Tenants should be aware that some commercial property owners believe that excluding a definition of vanilla box from their leases will give them more flexibility in what they must provide or allows them to avoid negotiating with the tenant about exactly what will be included. But that is a risky road to follow. Defining vanilla box in a lease gives both parties certainty of what the owner will provide, and the items for which the tenant is responsible.

Without clarifying the condition in which the space will be delivered, the owner and tenant will have different expectations, which could lead to conflict and even potential lawsuits. And that is not the best way to begin the owner-tenant relationship.

PRACTICAL POINTER: The terms “vanilla box” and “as is” are not synonymous. A lease may require the tenant to agree to take the space “as is—in the condition existing at the time the lease was signed or at another time specified in the lease. The term “as is” means that the tenant is responsible for finding out what is and is not included in the space, and what each of the parties is expected to provide.
When a tenant agrees to take a space “as is,” any misunderstanding about what is and is not included in the space is likely to be resolved against the tenant. However, the tenant can protect itself by speaking to construction professionals before signing the lease to make sure that it understands what the space will and will not include.