Powered shell vs turnkey is the choice between leasing a building with power and fiber brought to it and fitting out the electrical and mechanical plant yourself, or leasing finished, operating capacity by the kilowatt. A powered shell lands at roughly $4 million to $8 million per MW of development cost against $12 million to $13 million for a fully fitted facility, but that gap doesn’t disappear. It moves onto the tenant’s balance sheet, along with a 10 to 20 year lease and the job of running the plant. For requirements between 2 and 20 MW that trade is rarely as attractive as the headline rate suggests, and this guide sets out where the crossover actually falls.
What is the difference between powered shell and turnkey colocation?
A powered shell is a purpose-built building delivered with utility power to the site, structure, and fiber routes nearby, and nothing else. datacenterHawk describes it as a facility that omits the plant that makes it a data center. No UPS, no generators, no cooling. The tenant installs all of it. Leases are usually written on square footage rather than the per-kW basis the rest of the industry quotes, which alone makes the two models hard to compare on a single number.
Turnkey colocation is the opposite. The operator has already built and commissioned the power train and the cooling, holds the maintenance contracts, staffs the site, and sells you contracted kilowatts with an SLA. You bring servers, and that’s it. Pricing is per kW per month, as set out in the 2026 colocation pricing guide.
Between the two sits wholesale colocation, which is turnkey capacity sold by the hall or the building rather than the cabinet. Most 2 to 20 MW requirements end up there. Buyers who ask about powered shell are usually asking a different question: can we do better by taking the build on ourselves?
What does each model cost per MW in 2026?
| Dimension | Powered shell | Turnkey or wholesale |
|---|---|---|
| Development cost per MW | $4M to $8M (datacenterHawk) | $12M to $13M (datacenterHawk); JLL forecasts a global average of $11.3M per MW in 2026, up 6 percent |
| Who funds the fit-out | Tenant, as capex | Operator, recovered in the rate |
| Lease basis | Per square foot, triple net, $10 to $25 per sq ft a year | Per kW per month, service inclusive |
| Typical term | 10 to 20 years, with extension options | 3 to 7 years retail, 5 to 15 years wholesale |
| Escalators | 1.5 to 3 percent a year | Fixed or indexed, negotiated |
| Time to operate | 6 to 12 months shell, 3 to 6 months fit-out, 9 to 18 months total | Weeks to months in existing halls, 2028 for new primary-market builds (JLL) |
| Who runs the plant | Tenant, or a contracted operator | Operator |
| Balance sheet treatment | Long lease plus owned equipment | Service contract |
Sources: datacenterHawk on powered shell, Digital Infrastructure’s powered shell reference, JLL 2026 Global Data Center Outlook.
The shell itself is a small share of the finished asset. Published build costs run $105 to $275 per gross square foot for land and shell together, which is 10 to 20 percent of the cost of a fully fitted data center. Everything else is the part the tenant would be funding. That part isn’t a rounding error. JLL puts the tenant technology fit-out for AI infrastructure at as much as $25 million per MW, and general construction costs have climbed at a 7 percent compound rate since 2020, from $7.7 million per MW to the $11.3 million forecast for this year.
Published shell rents give a sense of the lease side. Amazon’s Manassas facilities were signed at $10.50 per square foot against a $12.00 market, its Sterling space at $14.52, and NTT’s Quincy buildings at $18.39 against a $21.00 market. Those are triple net rents, so taxes, insurance and maintenance sit with the tenant on top of them.
Where is the crossover for a 2 to 20 MW requirement?
Below about 5 MW, powered shell almost never pencils. Three reasons, none of them the rate.
The first is minimum viable size. Powered shell is a hyperscale product. Of roughly 130 powered shell deals tracked globally, about 100 are in Northern Virginia, and the counterparties are the largest cloud and content buyers in the market. Developers underwrite these to unlevered yields of 6.5 to 8.0 percent on long leases to investment grade credit. A 3 MW requirement on a five year horizon doesn’t clear that bar, and the shell you’d need is a fraction of a building nobody wants to subdivide.
The second is capex. At $12 million per MW all in against $4 million to $8 million for the shell, a tenant taking the shell route is funding somewhere between $4 million and $8 million per MW of electrical and mechanical plant before a single server arrives. On 5 MW that is $20 million to $40 million of capital that a turnkey lease would have converted into monthly operating cost. Whether that’s good or bad depends on your cost of capital and what else the money would be doing.
The third is the term. A 10 to 20 year triple net lease with 1.5 to 3 percent escalators is a long commitment to one building in one market. Buyers whose requirement is growing, uncertain, or tied to a customer contract with its own end date can’t credibly sign it.
Above roughly 10 MW the arithmetic starts to move. The capex per MW falls with scale, an in-house or contracted operations team becomes affordable, and the saving compounds over a term long enough to matter. Between 5 and 10 MW it is a genuine judgement call, and it turns on three things. Can you fund the fit-out without starving the rest of the business. Can you staff or contract round the clock site operations. Are you confident about this market, and this much capacity, in ten years.
What do you give up with a powered shell?
Speed, mostly. Nine to 18 months from a signed shell lease to live capacity is the published range, and that assumes the shell already exists. Turnkey capacity in an operating hall can be live in weeks. In a market where CBRE puts primary market vacancy at 1.4 percent and 80.4 percent of the 7,481 MW under construction is already preleased, the availability question usually decides it before the cost question gets a hearing.
You also inherit the risk that used to be the operator’s. Commissioning failures, equipment lead times on switchgear and generators, and the operating discipline that keeps a facility inside its SLA all become yours. The grid queue is the sharpest version of this: JLL reports the average wait for a grid connection in primary data center markets now exceeds four years, and a shell with power already delivered to it is valuable precisely because someone else waited.
What you gain is control and, eventually, margin. You choose the density, the cooling approach and the redundancy instead of taking the operator’s standard. For a liquid-cooled deployment at high rack density, that can be the deciding factor, since not every operator will retrofit a hall to suit one tenant.
How should you run the comparison?
Four steps make it a real comparison rather than a rate argument.
First, restate both options as total cost over the same term at the same load, including the fit-out capital, the cost of that capital, property taxes and insurance under the triple net structure, and the operations headcount or contract. A per square foot rent and a per kW rate aren’t comparable until you’ve done this.
Second, price the timing. Add the revenue or the program delay implied by 9 to 18 months against weeks, and treat it as a real number, not a footnote.
Third, test the term against your own visibility. If you can’t describe what this workload looks like in year eight, a 15 year triple net lease is carrying a risk your model doesn’t show.
Fourth, get live turnkey quotes for the same requirement before deciding. Powered shell looks best when it’s measured against a stale assumption about what wholesale capacity costs. The current bands by market and size are in the colocation pricing guide, the operators with listed capacity are on the GoDataCenters market pages, including Northern Virginia, and the requirement template is in the colocation RFQ guide.
FAQ: powered shell vs turnkey
Q: What is a powered shell data center?
It is a purpose-built building delivered with utility power brought to the site, the structure and fiber access, but without UPS, generators, cooling or any of the plant that keeps servers running. The tenant funds and installs all of that, and usually leases on a per square foot triple net basis rather than per kW.
Q: Is powered shell cheaper than turnkey colocation?
Cheaper on the lease line, yes. On total cost, usually not. Published development cost is $4 million to $8 million per MW for a shell against $12 million to $13 million fully fitted, and that difference becomes tenant capex plus the ongoing cost of operating the plant.
Q: What is the minimum size for a powered shell deal?
There’s no published floor, but the market is built around hyperscale requirements on 10 to 20 year terms, with about 100 of roughly 130 tracked deals in Northern Virginia. Requirements below about 5 MW are rarely underwritten, and buyers that size are usually better served by wholesale or retail colocation.
Q: How long does a powered shell take to deliver?
Published ranges are 6 to 12 months to build the shell and 3 to 6 months for the tenant fit-out, so 9 to 18 months in total where the shell isn’t already standing.
Q: Who is powered shell right for?
Buyers above roughly 10 MW with the capital to fund a fit-out, a data center operations capability in house or under contract, a density or cooling requirement an operator won’t accommodate, and enough certainty to sign a lease measured in decades.
Get turnkey quotes before you underwrite a build
GoDataCenters tracks 4,551 facilities across 109 countries and every published US market. Send your requirement through the quote request form and get a shortlist of operators with listed capacity in your market and size band, at no cost to the buyer. If you’re weighing a shell against a lease, send the shell terms too and we’ll run the comparison against live turnkey pricing instead of an assumption.