Shell Space denotes the interior condition of a specific space that does not have interior improvements or finishes. With a new development or new construction, the spaces are typically delivered in a Shell condition (See Cold Grey Shell vs Warm Vanilla Shell for more information); which means the space is essentially four perimeter walls with a primarily open floor plan and a ceiling. The tenant then builds out the space to their specific parameters which makes it no longer a shell, but a finished or built out space.
Additionally, a landlord or tenant may choose to demolish the interior finishes of an already built out space FREE EVALUATION beneficial or needed by the next tenant. This is returning a space to a Shell Condition and is often required prior to performing a new build out on a second generation space.
Shell construction typically denotes the floor, windows, walls and roof of an enclosed premises and may include some HVAC, electrical or plumbing improvements but not internal walls or interior space partitioning, individualized tenant finishes or fixtures.
Essentially, a Shell Space is an open box that is ready for a tenant to build out or install their unique fixtures in.
COLD GREY SHELL AND WARM VANILLA SHELL
A Cold Grey Shell is most often defined through understanding the two main descriptor words before the word shell:
Cold: typically means the space does not have HVAC (heating, ventilation and air conditioning) available or installed in the space; and hence, the space cannot be heated (or cooled) prior to the HVAC being installed. In this instance, an HVAC unit or units will need to be installed or tied into in order to bring heating, ventilation and air conditioning to the space.
Grey: typically means the space has no other improvements to it such as a drop ceiling grid or drywall ceiling, lighting, flooring, or any other standard improvements such as a restroom, built out offices, etc. The word grey speaks to the fact the floor and any exterior walls are often the color grey because of the untreated concrete floor or walls.
A cold grey shell is essentially a space with no HVAC or finishes of any real substance.
In comparison, a Warm Vanilla Shell is close to the opposite of a Cold Grey Shell, as defined by:
Warm: the space does have an HVAC system connected and functional, or at least is attached to the premises and ready to be hooked up. Warm means the space can be heated and / or cooled.
Vanilla: typically refers to the space having finished exterior walls with drywall, a drop-grid ceiling or drywall ceiling with lighting, HVAC that is distributed and often also includes some level of additional build out such as a finished restroom(s) with running water, sewer, plumbing, fixtures, etc. The space may also contain some level of additional buildout such as any amount of offices or additional walls and interior rooms.
Many retail and office building landlords will prepare a vacant space in a Warm Vanilla Shell delivery so that certain tenants might be able to immediately move in with very minor adjustments to the space or with the just the installation of their tenant specific furniture, fixtures and equipment.
However, there are some tenants who prefer a Cold Gray Shell vs. a Warm Vanilla Shell if they have unique requirements for their mechanical systems. A build out would require them to replace some of the improvements a landlord may perform in a Warm Vanilla Shell. Meaning, if the landlord spends money on a specific ceiling grid, lights and restroom location but the tenant wants something different, there can be a waste of a healthy amount of money. That money would have been better slated for the tenant to use on exact items and finishes they wanted vs. what the landlord already put into the space.