If you want to open a retail business (store or restaurant, or whatever) and you are looking to lease a space, there are a few terms you should know:
COLD DARK SHELL: This is a basic space with bare studs showing, usually no floor (just dirt), no ceiling, etc. Such a space is great for retail because you can pretty much do anything. You can put water and electrical in the ground and then pour the slab over them. You can add sound-insulation in the walls and then add the wall-board. You can put the ceiling in at any level or even create interesting ceiling features. It is a “cold” shell because there is no HVAC (Heating, Ventilation & Air Conditioning) and it is “dark” because there is no lighting. Since the tenant is responsible for doing everything, a cold dark shell is usually a more costly endeavor.
WHITE BOX: This is a space that has already been partially prepared for a tenant to move in. The walls already have wall board, and may even be painted with a base coat primer. Most of the major electrical work has been done and there is already a poured floor slab and usually a drop grid ceiling with generic lighting. There may even be a restroom and mop sink or janitor’s closet installed in a typical location. Since all this work has already been done, it is less costly for a tenant than a dark shell, but it can be limiting in regards to layout. The plumbing and electrical that occurs below the slab may not be in the location(s) your floor plan requires. Therefore, the tenant (you) will have to spend money to cut the slab, move or install the utility, and then patch the concrete. Some landlords will not allow the slab to be touched in this way; it usually depends on the lease length.
CAM: Common Area Maintenance fees. The regular cleaning and maintenance of everything from the roof to the parking lot is usually split between all the tenants. Other areas that may be included in the CAM charges is the garbage collection area (and pick up charges), any lobbies, hallways, exit corridors, or meeting spaces, any leasing offices, janitorial rooms, garages, landscaping, fountains or other water features, and exterior lighting. All of this can add up to quite a large fee per month that is tacked onto the actual lease payment. In the case of office spaces, paying for these CAM charges would often be considered a “Triple-Net Lease”, whereas if the landlord is going to pick-up these charges then the tenant is only paying a “Gross Lease”.
TENANT FIT-OUT, OR BUILD-OUT: Anything that is needed for a space that the tenant needs. In the case of a cold dark shell, every single thing on the inside of the space counts as part of the fit-out with the exception of display fixtures, sales counters, signage and merchandise. The flooring materials, paint, any new walls, doors, lighting, etcetera counts as the tenant fit-out.
FFE: Fixtures, Furniture & Equipment. When you are working with a general contractor (and an architect) you, as the tenant, should specify what items are to be covered in the contracts. Many times the fixtures, furnishings and equipment are not a part because the tenant wants to provide their own items and not have the contractor purchase them (and mark them up). Chain stores typically have a set package of FFE that is not included in the general contracts and not specified by the architect. Fixtures generally include displays, mannequins, signage, and some counters. Built-in cabinetry is usually not part of the FFE package. Furniture, as the name implies, includes seating but can also be movable merchandising displays. The equipment portion usually applies to kitchen equipment such as baking ovens, stoves, mixers, racks, shelving, and specialty tables. Coolers and freezers can be part of the FFE package or separate, depending on whom will be responsible for their purchase and installation. HVAC and Plumbing equipment is not usually part of the FFE package.
UBC: The Universal Building Code. This is the master code that architects, engineers and building contractors have to follow. In the cases of health and safety there is absolutely no way to get a variance or waiver for these items. For instance, if your space is over a certain size and will have a certain occupancy load (number of possible people that can fit into a space, regardless of whether or not there will ever really be that many people), then the space may require an additional fire exit. There is no way to get a variance for this. If someone, somehow obtains a “waiver” and the inspectors or fire marshal don’t catch it, then years later there is a fire and someone gets hurt or dies, then you can be held liable for not following the UBC. Variances and waivers only apply to local codes such as number of parking spaces, or how much landscaping is required. You don’t have to know the UBC, but your architect or designer and contractors will.
CLASS: BOMA The Building Owners and Managers Association International has put office space into three categories which is widely used by the real estate industry: Class A, B, and C. Class A offices are those that are in the best locations, most “prestigious” buildings with rents above average for the area. Such offices usually have the best finishes, state of the art systems, and location. Class B offices are those that are the most common, with standard finishes, and have the most tenants competing for them, with, of course, average prices. Class C offices are for “tenants requiring functional space at rents below the average for the area.”
