I personally think some of the most confusing terms in all of commercial real estate are: Cold Dark Shell, Warm Grey Shell and Warm Vanilla Shell.
This is due by and large to the fact that, even within the commercial real estate industry, there seems to be differing opinions on exactly what each term entails.
So let’s take it back to basics and try and sort through the mess.
To begin with a “shell,” in commercial real estate, typically refers to an unfinished or partially finished space for lease. Leasing shell space to a tenant allows them to design and construct the interior space of their suite or building according to their exact specifications. So the completed space should suit the tenant as perfectly as possible, since the improvements made under a shell lease are tailored to their specific needs and desires.
However, not all shells are created equal and that’s where the confusion comes in:
Let’s start with Cold Vs. Warm
Simply put a “Warm Shell” is going to have an HVAC unit installed in the space. A “Cold Shell”, is going to be well… cold, as it has no HVAC unit installed.
Not too bad so far, let’s move onto Lit vs. Dark
A “Dark Shell” will typically have no power connected yet to the space, or lighting installed. Whereas a “Lit Shell” should have, at a minimum interior lighting and power installed to the site.
Ok now let’s start getting fancy and try out “Cold Dark Shell”
To begin with we can deduce from the name that the space has neither HVAC, power, or lighting connected to the space yet. This type of space is also usually turned over to the tenant with conduit leading from the utility meter base to the space, however there is no actual electrical panel installed or power distribution of electrical throughout the space. Additionally, this type of space usually comes complete with water and sewer stubbed into the space.
Moving on we get to a “Warm Grey Shell”
This type of space now has HVAC and power, however the only thing typically powered at this point is the HVAC unit itself. An electrical panel will be hooked up and the HVAC will be powered, but everything else in the space will be left blank.
Of all the differing types of space, this one is the most, well, grey. More than any of the other types of space this state can have many different meanings or modifications depending on the agent, or the landlord or the construction company, so it’s important to get the exact specifications spelled out on this type of space before agreeing to accept it.
Next up we have “Warm Vanilla Shell”
A “Warm Vanilla Shell” space will typically have lighting and power connected throughout the space, a finished ceiling, HVAC, HVAC distribution, restrooms built to meet code, a floor that is ready for covering and walls that are sanded and ready to paint.
Again, this term can vary on what it entails from person to person, so it’s important to double check with your broker, or construction team on the specifics.
Finally we have “Turn Key Space”
Simply put a “Turn Key Space” is plug and play. The space is built out to the tenants’ specifications and standards and just needs to have an IT company come in to preform the final service hook-ups and you’re ready to move in and open for business.
Now for the really confusing part, all these terms have about 100 different variations on how they are referred to such as: warm white box, base shell, arctic shell, tropical shell, bare shell, dark box, white box shell and the list goes on and on. And as I stated before, each of these can mean something different depending on who you are talking to.
So the moral of the story is: always ask for specifics, get clarification, and make sure that everyone is referring to same thing no matter what term is being used. And we’re always here to help if you need us!