Shell vs Turnkey Buildout Calculator

Cold shell leases have lower rent but tenant pays TI out of pocket. Turnkey has higher rent but landlord funds TI. Over a fixed term, compare all-in cost. This calculator stacks rent + TI and shows which option is cheaper and by how much.

Leased SF

Cold/warm shell rent / SF / year

Turnkey rent / SF / year

Turnkey TI included / SF

Tenant shell TI budget / SF

Lease term (years)

Shell total cost (rent + TI)

$2,190,000

Turnkey total cost (rent only)

$2,380,000

Savings from shell (+ = shell better)

$190,000

Tenant's shell TI budget

$650,000

Shell is cheaper

Yes

How the math works

Cold/warm shell: landlord delivers base building; tenant funds all TI. Turnkey: landlord delivers fully built space; rent is higher to recover the TI. Over a fixed term, compare all-in costs including landlord TI amortized into turnkey rent.

Tenant TI gets Section 168 depreciation + expensing benefits that turnkey doesn't (since tenant doesn't own TI). Factor tax treatment into the decision for longer leases.

How to Use

Enter leased SF and lease term.
Enter shell and turnkey rent per SF per year.
Enter turnkey TI included per SF.
Enter tenant's shell TI budget per SF.
Read cost comparison.

Frequently Asked Questions

Which is more common?

Office: turnkey or shell with allowance (mixed). Retail: shell is standard ('vanilla shell' = drywall, basic plumbing). Industrial: cold shell with tenant install racking/lighting. Medical: often turnkey due to specialty MEP.

Cash flow considerations?

Turnkey preserves tenant cash — no upfront capex. Shell requires cash for TI at move-in. Young companies or those planning expansion often prefer turnkey to keep cash for growth.

Tax considerations?

Shell TI is tenant-owned — tenant depreciates. Turnkey TI is landlord-owned — tenant pays through rent. Rent is immediately deductible; depreciation is spread over useful life. Run after-tax numbers for both scenarios.