Friday April 12, 2024

Raw Space

Many commercial buildings offer tenants space in “raw” condition. A raw space is minimally finished with four walls and a door. To complete the raw space is commonly known as a “build-out”.

DEFINITION of ‘Shell Lease’
A “shell lease” is when a tenant rents an unfinished interior space and completes the construction. The tenant will finish construction, fixtures, equipment, and furniture. Any improvement necessary to the space will the tenant’s responsibility. A “shell” or unfinished space is likely to be found in a new office unit or retail space.

Negotiations between a property owner and potential tenant are extensive and will include: 

  1. Any proposed improvements or construction.
  2. The party who will be responsible for the payments.
  3. The party responsible for completing the work.
  4. Any permitted improvements that may or must be removed at the end of the lease

There are many forms of a “shell” lease contingent on the already completed work and the remaining work. In a “shell” lease, the tenant may complete substantial work and construction. Portions of construction may include installing plumbing, lighting, ceilings, interior walls, electrical wiring, elevators, and HVAC systems. Other “shell” leases will indicate what construction the property owner and the tenant are responsible for completing. Many leases include a financial incentive to the tenant for finishing construction.

Build-To-Suit: Utilized in commercial properties to lease space designed and completed to a tenant’s specifications, typically by property owners.


If you are searching for a raw commercial space in Manhattan, contact one of our established brokers. Our brokers have the details and spaces available in buildings throughout Manhattan. They can assist in finding a space to fit your needs and requirements.

If you are interested in or just considering renting or purchasing a raw space and would like more information, call us – as a tenant brokerage – our services are available to you at no fee. If you would like to ask some questions and receive some information, we can help at no obligation.