Key takeaways
- In a powered shell the landlord delivers the building and utility power. The tenant designs, funds and installs the electrical and mechanical fit-out, and usually operates it.
- Rent is far lower than turnkey because the tenant carries the fit-out capital. The model pays off only for teams that can design, procure, build and run critical infrastructure.
- Schedule risk moves to you. Long-lead electrical equipment and commissioning sit on your critical path, not the landlord's.
- Get the power commitment in writing: megawatts at the building, feed redundancy, energization date and the remedy if that date slips.
What is a powered shell data center?
A powered shell is a finished building envelope built to data center standards, with utility power delivered to the site. Structure, roof, slab and floor loading are designed for data center equipment. The power path from the utility is in place or contractually committed. What is missing is the critical infrastructure inside: the switchgear, UPS systems, generators, power distribution and cooling that turn a building into a data hall.
The tenant, or an operator working for the tenant, completes that fit-out. It is one point on a spectrum of delivery models, and the terms are used loosely, so always confirm the scope in writing.
| Model | What exists when you sign | Who finishes it |
|---|---|---|
| Powered land | Land with a documented path to utility power | A developer or self-building tenant builds everything |
| Powered shell | The building and utility power | The tenant designs and installs electrical and mechanical systems |
| Warm shell | The building, power and some shared infrastructure, such as a central plant or generator yard | The tenant completes the halls. Scope varies widely by landlord |
| Turnkey wholesale | A finished, commissioned data hall | Nothing. The tenant installs IT equipment |
| Pop-up or modular | A powered site, with no building | Factory-built modules are set on a pad and connected |
What the landlord delivers and what you deliver
The line between landlord work and tenant work is drawn in the lease, usually in a work letter. This is a typical split. Your lease may move items across it.
| Scope item | Powered shell | Turnkey wholesale |
|---|---|---|
| Building structure, roof, slab and floor loading | Landlord | Landlord |
| Utility service to the site, substation or main switchgear | Landlord | Landlord |
| Medium-voltage distribution inside the building | Varies | Landlord |
| UPS, generators, low-voltage switchgear, busway and PDUs | Tenant | Landlord |
| Cooling plant, air handling, liquid cooling distribution | Tenant | Landlord |
| Fire detection and suppression in the halls | Varies | Landlord |
| Site security and perimeter | Landlord | Landlord |
| Commissioning of critical systems | Tenant | Landlord |
| Operating and maintaining critical systems | Tenant | Landlord or its operator |
Who leases powered shells
- Hyperscalers and large cloud platforms with standard designs, their own supply chains and operations teams. For them a shell is the fastest way to deploy a design they have built many times.
- AI companies and GPU clouds whose liquid-cooled designs differ from what landlords build speculatively, and who want to own the cooling architecture.
- Operators who lease a shell and fit it out as turnkey halls for their own tenants.
- Enterprises, rarely. It suits an enterprise with an experienced facilities team and a long-lived, predictable requirement. Most enterprises are better served by a turnkey hall.
Powered shell vs turnkey vs build-to-suit
| Powered shell | Turnkey wholesale | Build-to-suit | |
|---|---|---|---|
| Your capital | High: you fund the fit-out | Low: equipment and cabling only | Low to moderate, depending on structure |
| Rent | Lowest | Highest | Set from the project cost and the landlord's return |
| Design control | Full inside the shell | Limited to the operator's options | Full, agreed before construction |
| Schedule risk | Yours after shell delivery | The operator's | Shared, set out in the development agreement |
| Operating burden | Yours | The operator's | Agreed in the lease |
| Typical term | Long, to amortize your fit-out | Shorter terms are possible | Long |
Rent and fit-out costs
Powered shell rent is usually quoted per square foot per year on a triple net basis, rather than per kW per month (datacenterHawk). It is far below turnkey rent because the expensive part of a data center is not the building. The CRE Finance Council puts mechanical, electrical and plumbing systems at 60 to 70% of development cost, and, citing KBRA, the building shell at 20 to 30% (CREFC, January 2026). In a powered shell, most of that 60 to 70% is yours.
| Published cost figure | Scope | Source |
|---|---|---|
| $17.6 million per MW average; $8.9 to $23.3 million range | All-in greenfield build in the US and Canada, excluding chips and GPUs. The average is for the most modern facilities; the range is from the full guide. Up 21% per MW since late 2024 | Cushman & Wakefield, September 2026 |
| $11.3 million per MW | Shell and core only, global average forecast for 2026. JLL adds that AI tenant fit-out can reach $25 million per MW | JLL, January 2026 |
| $4 to $8 million per MW, against $12 to $13 million for turnkey | Development cost of a powered shell versus a turnkey facility, 2025 | datacenterHawk, February 2025 |
The practical comparison is total cost over the term: shell rent plus your fit-out capital and its financing, operating staff and maintenance, against a turnkey rent that bundles all of it. Cushman & Wakefield's 2026 guide puts power infrastructure at 21% of greenfield cost and cooling at 12%, the two largest systems a shell tenant installs.
Northern Virginia dominates this product. datacenterHawk counted about 100 of the roughly 130 powered shell deals it tracked worldwide in that market. One example: COPT Defense reports 33 data center shells totaling 6.3 million square feet in Northern Virginia, leased to a single Fortune 100 cloud customer on triple net leases signed before development started (COPT Defense 10-K).
What drives the schedule
Once the shell is delivered, your clock starts. The long poles are electrical equipment and commissioning. Cushman & Wakefield's 2026 guide, using Gilbane data, lists these lead times:
| Equipment | Lead time |
|---|---|
| Pad-mounted transformers | 68 to 113 weeks |
| Generators | 60 to 100 weeks |
| Medium-voltage switchgear | 38 to 63 weeks |
| Low-voltage switchgear | 36 to 60 weeks |
| UPS systems | 36 to 42 weeks |
Delays are common. In Uptime Institute's 2026 supplier survey, 83% of suppliers reported disruption to build projects and 58% reported delays of at least three months (Uptime Institute, August 2026). If a transformer takes two years to arrive, order it before you sign the lease, or ask the landlord which equipment it has already reserved.
Lease terms that matter in a powered shell
- Power delivery commitment
- Megawatts available at the building, voltage, the number and independence of utility feeds, the energization date, and rent abatement or termination rights if that date slips.
- Work letter
- Exactly what the landlord builds, to what specification, by when. Floor loading, clear height, generator yard space, fuel storage, cooling tower or dry cooler space, and conduit paths all belong here.
- Tenant improvement allowance
- Any landlord contribution to fit-out, how it is paid, and how it affects rent.
- Equipment ownership and restoration
- Who owns the equipment you install, whether you must remove it at the end of the term, and whether the landlord can buy it. Restoration obligations can cost millions if left vague.
- Permits and operating rights
- Generator air permits, fuel storage, noise limits and 24-hour access. A generator you cannot run is not backup power.
- Utility account
- Whether you contract with the utility directly or buy power through the landlord, and how large-load tariff obligations, such as minimum demand charges, are allocated.
- Expansion
- Rights to adjacent shells or land, and the power that goes with them, so your second phase is not a new negotiation.
- Term, renewals and exit
- A term long enough to recover your investment, renewal options at known pricing, and assignment or sublease rights if plans change.
Rent, power billing, renewal and exit terms common to every wholesale lease are in our data center leasing guide.
Questions to ask before you sign
- Is utility power energized at the building today? If not, what is the utility's committed date, and what does the utility's agreement actually commit to?
- How many megawatts can the building take, at what voltage, from how many independent feeds?
- What is the structural floor load rating, and is it enough for liquid-cooled racks and their coolant?
- Where do generators, fuel, heat rejection and electrical rooms go, and are they permitted?
- Which long-lead equipment have you ordered, and which is my responsibility?
- What must be removed or restored at lease end?
- What land and power is reserved for my expansion, and at what price?
Frequently asked questions
What is the difference between a powered shell and a warm shell?
A powered shell provides the building and utility power. A warm shell adds some infrastructure, such as a central cooling plant, a generator yard or medium-voltage distribution. Landlords use both terms differently, so compare the work letters rather than the labels.
Is a powered shell cheaper than turnkey space?
The rent is lower, but you fund and run the fit-out. Compare the full cost over the term: rent, your capital and its financing cost, operations staff, maintenance and the value of design control. For teams that already design and run data centers, a shell often wins. For most enterprises, turnkey does.
Who operates a powered shell data center?
Usually the tenant, or an operator the tenant hires. The landlord maintains the building and site. The lease should say who is responsible for each system.
Can an enterprise lease a powered shell?
Yes, if it has, or will hire, the engineering and operations capability. Many enterprises with shell-scale requirements choose a turnkey hall or a build-to-suit instead, which keeps operations with a specialist.
Sources
- Cushman & Wakefield, 2026 Data Center Development Cost Guide release, September 3, 2026, and the guide itself.
- CRE Finance Council, Data Center E-Primer, January 2026.
- JLL, 2026 Global Data Center Outlook, January 5, 2026.
- datacenterHawk, Understanding powered shell data centers, February 19, 2025.
- COPT Defense Properties, Form 10-K for 2025.
- Uptime Institute, Annual Survey 2026: supplier view, August 2026.