If you’re a business owner looking for office space to lease, it’s important to understand the level of construction involved in a particular block or floor. The physical condition of an office space can vary widely, from raw and unimproved to move-in ready. To help you make sense of the various terms used in commercial real estate, here are some definitions:
- Shell space: This is completely unfinished interior space, with concrete floors, exposed columns, unclad walls, and open ceilings. It may have taps for future installation of mechanical, electrical, and plumbing systems, as well as a sprinkler system. Shell space is typically found in new or extensively renovated buildings and requires the most complex and expensive type of build-out. However, it also offers the greatest flexibility in terms of design and layout.
- White box space: This is a slightly upgraded version of shell space, with minimal finishes such as drywall on the walls and finished tiles on the ceiling. It may or may not have an HVAC system installed.
- Partially built-out space: This is a space that has some finished elements, such as carpet or flooring, finished ceilings, and interior walls demarcating offices, lounges, kitchens, or conference rooms. However, the layout and finishes may be outdated or worn, and some elements of the space may be highly specialized and require demolition.
- Spec suite: This is a newly constructed office suite designed and laid out by a landlord for quick occupancy by a tenant.
When looking at office space listings or advertisements, you may encounter these terms or variations of them. Keep in mind that they are not legal or technical terms and may vary regionally. Landlords may offer a tenant improvement (TI) allowance to help cover the costs of construction or upgrades.
