Marketing Your Property: Why a Shell Makes Sense

You have commercial property to sell or lease. The space was perfect for your business, which you’ve moved out. Offices, warehouse space, and everything else was exactly what you needed. You think it’s amazing, but you’re just not having any luck offering it to prospective buyers or tenants. They’ve told you what they envision, but the renovation would be expensive. Or sometimes you start construction and hope to offer the property for lease when it’s complete, but the economy has lowered your budget significantly. You can’t complete the project the way you want, but you’re at a loss for how to complete the interior within your new budget. 

Marketing Your Property - Why a Shell Makes SenseWhat is your best option?

Shell Construction

Shell construction means that your space has a partially or completely unfinished interior. Vanilla, or warm, shell spaces have finished exterior walls, ceilings, lighting, and a basic open floor plan. The term “warm” is used because an HVAC system is connected and ready to go. Some or all walls, restrooms, and utilities are in place. Your potential buyer can then finish out the interior with minor adjustments or upgrades, and then the property is ready to be used.

A gray, or cold shell, is the opposite. Typically, there is no HVAC installed, and walls aren’t finished. Offices aren’t built out, ceilings aren’t installed, but the foundation and structure are there, ready to be completed.

Why Choose a Shell

Economically, it may be in your best interests to use a shell instead of a fully finished space. If you’re just starting construction of a space, keep in mind that potential tenants may have a very specific floor plan and buildout in mind that is completely different from the one you envision. A shell makes sense in that regard, because you don’t have to pay the costs to fully complete that construction only for an occpuant to eventually demolish and refit the interior. 

If you’re having trouble leasing a finished space, removing all or part of the interior may be a great way to step back and remarket the property. Buyers and leaseholders can use their imagination and build out the interior exactly the way they want. While you will have the cost of removing some of the interior that worked for you or a previous tenant, and you’ll likely lease at a lower list price, you may find that it’s easier to lease or sell a space with endless options and possibilities. The ability to lease often outweighs additional profit when there aren’t any offers. And if you’re leasing the property out, you can then work with the buyer to build out what they need, which means you won’t need to reduce the price the same way you would if you were selling. 

There are many options when you own commercial property. A warehouse space or large office building may work best when not fully finished. And when you’re in doubt about what type of shell meets your needs the best, your real estate agent and a good construction company like Buildrite Construction can help you sort through the options – along with their pros and cons – and find the solution that works best for your property and budget to make it more marketable when you choose to sell or lease.

Want more? Read about Buildrite’s renovation services.