Vanilla shell improvements (VSI)
Improvements made to a commercial or residential building resulting in a a minimally finished interior. VSI's
usually include ceilings, lighting, plumbing, heating and cooling (HVAC), interior walls (painted or unpainted),
electrical outlets, rest rooms, and a concrete floor. A vanilla shell is considered ready to lease and ready for tenant improvements. Usually, vanilla shell improvements are not completed until the lease agreement between the
tenant and landlord has been negotiated and executed.
Same as Under-ceiling improvements.
Discussion: Like many real estate terms and phrases, those associated with shell leases (e.g., vanilla shell, base shell, cold shell, warm shell, etc.) differ by location and situation, sometimes even within the same region or municipal area. As they say, the devil is in the details. The lease or sales contract should clearly and exactly specify the degree to which construction of any sort of "shell" building has been or will be completed prior to tenant occupancy.
Shell leasing and its various forms (warm, cold, base) are used primarily in commercial real estate, but are gaining popularity in upscale condominiums and townhouses and other high-end residential real estate transactions. The idea is to attract either tenants or buyers, or both, by offering customizable living units. Financial incentives in the form of tenant (or buyer) improvement allowances afford new residents the opportunity to select nearly all aspects of interior decor, including relatively large projects such as plumbing and fixtures, wiring, and interior walls.
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Added: Fri May 02 2008
Last Modified: Thu Jul 10 2008