"As-is" is one of the most quietly expensive phrases in commercial leasing. It sounds like a simple handoff — take the space the way it sits — but it almost always means the tenant inherits whatever condition, capacity, and risk exist in the building's existing systems, without a documented baseline to point back to if something turns out worse than advertised. For a retail or restaurant buildout, that gap between "as-is on paper" and "as-is in reality" routinely becomes a change order, a permitting delay, or a cost nobody budgeted for.

The fix isn't avoiding as-is leases — they're common and often unavoidable. It's doing the due diligence before signing instead of after, while these items are still negotiable.

I've run this exact review across more than 20 retail and commercial projects. It holds up consistently: these checks have identified and shifted back onto landlords — rather than landing on the tenant — more than $1 million in construction costs across that project history.

Electrical: verify the actual capacity, not the nameplate rating

Landlord-provided panel schedules for previously-occupied spaces are frequently outdated, or still reflect equipment a prior tenant removed. Before assuming the existing service works for a new concept:

  • Request the existing panel schedule and as-built single-line diagram, then field-verify against actual panel labeling.
  • Confirm actual spare/available capacity on the panel — not nameplate rating. A prior tenant's connected load may already be consuming most of it, and base-building service to the unit may be shared or capped with other tenants.
  • Check panel age, manufacturer, and condition. Insurers or the local AHJ may require replacement of obsolete equipment regardless of remaining capacity or what the lease says.
  • Verify voltage and phase configuration (120/208V vs. 277/480V, single vs. three-phase) actually matches the new store's equipment and lighting design. A mismatch means a new transformer or step-down — a cost as-is leases almost never cover.
  • Determine whether the disconnect/switchgear is dedicated to the unit or shares a common bus, and get the actual allocated capacity in writing.
  • Ask specifically whether a prior tenant's capacity upgrades (dedicated transformer, upsized service) get removed or de-rated once that tenant vacates — an easy detail to miss that can quietly shrink what "as-is" delivers.
  • Where accessible, pull utility company demand history for the meter as an independent check against the landlord's stated capacity.
  • Confirm there are no open permits, red tags, or known violations tied to the existing electrical work.

Mechanical: existing HVAC is a common source of post-occupancy surprise

  • Get actual maintenance records and nameplate data (tonnage, refrigerant type, manufacture date) for existing RTUs or split systems directly, rather than relying on a landlord summary.
  • Flag legacy refrigerant equipment (R-22 and similar) specifically — parts and refrigerant are increasingly scarce and expensive.
  • Confirm cooling/heating capacity against the new store's actual load. Luxury retail buildouts — feature lighting, specialty finishes, sometimes a back-of-house kitchen or tea room — often run hotter than whatever load the existing system was sized for originally.
  • If existing roof curbs or penetrations are meant to be reused, confirm roof structural capacity for any replacement unit and get landlord sign-off — roof work typically falls outside as-is tenant scope.
  • Apply the same scrutiny to any other reused MEP equipment relevant to the concept — water heaters, grease interceptors, and similar.

General protections worth negotiating into an as-is lease

A few terms are worth pushing for even when the overall lease structure is firmly as-is:

  • Commission an independent survey of the space before execution and attach the findings as a lease exhibit establishing baseline condition. Without a documented baseline, "as-is" disputes have nothing to point back to.
  • Push for a "delivered in good working order" representation on existing systems being reused — a lower bar than a suitability-for-use warranty, and usually easier to get.
  • Negotiate a short latent-defect window (30–60 days post-possession) where the landlord stays responsible for correcting hidden deficiencies in existing systems, notwithstanding the as-is language.
  • Get written landlord acknowledgment of any prior-tenant unpermitted work discovered during permitting or inspection, with correction responsibility shifted to the landlord — otherwise your contractor can end up blamed for someone else's violation.
  • For older buildings, request a hazmat survey (asbestos, lead) covering existing finishes and equipment slated for demolition. As-is often silently includes as-is hazmat.
  • Clarify upfront who bears removal and disposal cost for inherited equipment that isn't reusable — a frequent surprise that surfaces only after the lease is already signed.

The takeaway

None of this requires walking away from an as-is lease — it requires treating "as-is" as a starting point for due diligence, not a reason to skip it. The tenants who come out ahead are the ones who get an architect or contractor into the space before signing, not after.

Royal Tier Maison runs this kind of due-diligence review as a standard part of early project scoping for retail and commercial clients. If you're evaluating an as-is space and want a second set of eyes on what you're actually inheriting, get in touch.