When buying or leasing commercial real estate you will often come across a space that is in plain vanilla shell condition. Other terms you may have heard are cold dark shell, warm shell space, grey shell, etc. As you can see it can get kind of confusing and to make it more interesting the definitions differ by market, situation, or whoever owns or is listing the building. The devil is in the details so it’s important that you know HOW the space will be delivered to you.
Ensure that the lease or sales contract clearly states the condition that the owner or landlord is going to deliver the space.
Definition of Shell Condition
The simple definition of shell condition is a commercial building (office, retail, or warehouse space) with an unfinished interior space. All that has been built are 4 walls, a roof, and a concrete floor. You will NOT see any hvac, lighting, ceilings, elevators, plumbing, interior walls, etc.
Because every tenant has specific needs landlords typically like to leave in cold dark shell condition, then offer a tenant improvement allowance to tenants during negotiations which will cover a portion or all of the improvements. This allows each tenant to customize the space to their liking.
Examples of Commercial Spaces in Shell Condition
Warehouse space in cold dark shell condition
retail space in shell condition
Retail space cold shell construction
Office space in shell condition
Office space in plain vanilla shell condition