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Base shell
Definition:
1. One form of a shell lease, a base shell is a commercial or residential building with an unfinished interior and lacking heating, ventilating, and air conditioning (HVAC), and usually without lighting, plumbing, ceilings, elevators, or interior walls. A base shell is ready for warm shell or vanilla shell improvements (VSI) as well as tenant improvements (TI's), which are to be completed by the tenant once the lease agreement has been negotiated and executed. In many cases, the landlord will offer financial incentives in the form of a tenant improvement allowance (TIA), which pays for or at least partially defrays the cost of any improvements necessary for the tenant to occupy the building itself. Tenant improvement allowances do not usually include furniture, fixtures, and equipment (FFE) or trade fixtures necessary for the tenant to conduct business. Usually vanilla shell improvements (VSI), or those improvements necessary to upgrade the building from a cold shell or base shell state, are not completed until the lease agreement between the tenant and landlord has been negotiated and executed. This ensures that the landlord does not pay for improvements that are unnecessary or that the tenant does not want.
2. The lease agreement or contract for a base shell building. A proper base shell lease should describe in detail the vanilla shell improvements (VSI) and tenant improvements (TI's) that are to be completed, and any other information necessary for construction of the building to be completed (commonly known as build-out) prior to tenant occupancy.
More or less the same as Arctic shell, Bare shell, Cold shell, Cold dark shell, Cold dark box, Dark shell, Dark box, Grey shell, or Grey box.
Discussion: Like many real estate terms and phrases, practical use and meanings of those terms associated with shell leases (e.g., vanilla shell, base shell, cold shell, warm shell, etc.) differ by location and situation, sometimes even within the same region or municipal area. As they say, the devil is in the details. The lease or sales contract should clearly and exactly specify the degree to which construction of any sort of "shell" or "box" building has been or will be completed prior to tenant occupancy. As either a tenant or landlord, you should not assume that the other party's definitions of shell lease terminology are the same as yours. Get it in writing, and make sure you understand and agree with all the terms and conditions of the shell lease agreement before you sign. If necessary, have a real estate attorney review the contract prior to its execution.
Shell leasing and its various forms (warm, cold, base, etc.) are used primarily in commercial real estate, but are gaining popularity in upscale condominiums and townhouses and other high-end residential real estate transactions. The idea is to attract either tenants or buyers, or both, by offering customizable living units. Financial incentives in the form of tenant (or buyer) improvement allowances afford new residents the opportunity to select nearly all aspects of interior decor, including relatively large projects such as plumbing and fixtures, wiring, and interior walls.
Terms, Definitions, and Concepts: Real Estate, Construction and Building, Appraisal, Auction, Finance and Investment, Management
Added: Fri May 02 2008
Last Modified: Tue Jul 22 2008
Related Terms
Shell lease Types of Leases What Are Leasehold Estates? Lease Leasehold (Leasehold estate) Landlord Tenant Commercial property Furniture, fixtures, and equipment (FF&E) Cold shell (Cold box) Vanilla shell (Vanilla box) Grey shell (Grey box) HVAC (hvac) Shell Slab to slab (Slab-to-slab) Slab-to-slab improvements Tenant improvements (TI) Tenant improvement allowance (TIA) Under-ceiling improvements Cold vanilla shell (Cold vanilla box) Vanilla shell improvements (VSI) Warm shell (Warm box) Cold dark shell (Cold dark box) Warm lit shell (Warm lit box) Dark shell (Dark box) Lit shell (Lit box) Arctic shell Warm vanilla shell (Warm vanilla box) Tropical shell Plain vanilla shell (Plain vanilla box) White box (White shell, White box shell) Plain white box (Plain white shell) Warm dark shell (Warm dark box) Cold lit shell (Cold lit box) Cold white box (Cold white shell) Warm white box (Warm white shell) Build-out Bare shellHave something to add? How useful is this Landterm? Bookmark this term
