Powered Shell Data Centers: Everything You Need to Know
- Yoann Hispa
- Jul 15
- 5 min read
When businesses evaluate their data center solutions, they often look for flexibility, scalability, and cost efficiency. Powered shell data centers are increasingly becoming the popular choice for organizations that want greater control and customization without starting from scratch. These unique facilities strike a balance between a foundational infrastructure and tenant-specific adaptability, making them particularly attractive to cloud providers, enterprises, and other tech-driven organizations.
This guide explores the nuances of powered shell data centers, including their benefits, development approaches, comparison to turnkey solutions, and insights into market trends and key players. Whether you’re an industry veteran or new to data centers, this breakdown will help you understand why these facilities are a key component in modern digital infrastructure.
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What Are Powered Shell Data Centers?
At their core, powered shell data centers are partially completed facilities designed to house computing infrastructure. The landlord or developer prepares the building’s exterior (the “shell”) and basic internal systems, such as power utilities and fiber-optic connectivity. From there, tenants step in to customize the interior to meet their operational needs, investing in essential components like cooling systems, server racks, backup generators, and IT equipment.
Key Characteristics:
Flexible Design: The interior is unfinished, allowing complete customization.
Basic Infrastructure: The landlord ensures the facility has foundational elements like power access and network connectivity.
Varied Sizes: These facilities can range from single-floor segments within a larger building to standalone multi-acre campuses.
Developed for High Demand: Powered shell data centers are well-suited for large-scale tenants like cloud computing providers, colocation companies, and enterprises managing AI workloads.
For instance, a hyperscale cloud provider like Amazon Web Services (AWS) might lease a powered shell facility and tailor it to handle high-density computing needs like artificial intelligence (AI) and machine learning applications.
Why Choose Powered Shell Data Centers?
Powered shell data centers stand out because of their ability to offer a balance between pre-configured infrastructure and bespoke operational setups. Here are the key advantages:
1. Customization and Operational Control
One of the most significant benefits is the flexibility to adapt the facility to meet highly specific technical requirements. Tenants can modify critical components like:
Power Configuration: Architecting setups with redundancy options for uninterrupted service.
Cooling Systems: Implementing air-based or liquid cooling solutions that align with operational efficiency targets.
Security Features: Designing custom security layouts to mitigate physical risks.
Structural Adjustments: Strengthening buildings to withstand natural disasters, like hurricanes or earthquakes.
This level of autonomy is especially appealing to organizations with unique technical needs who need their data environments to operate reliably and securely.
2. Faster Deployment
Compared to building a data center from the ground up, powered shell facilities drastically reduce the time it takes to bring a space into operation. This is because:
Initial construction hurdles, like entitlements and permit approvals, are already resolved.
Core utilities, such as power infrastructure and connectivity options, are pre-installed.
Modular construction methods speed up the tenant customization phase by preassembling components like cooling units offsite.
On average, completing a powered shell data center project, from construction to full operational readiness, takes between 9 to 18 months, significantly faster than traditional new builds.
3. Cost Efficiency
By leasing a powered shell facility, companies avoid the upfront capital expenses tied to land acquisition and large-scale construction. Instead, tenants can focus their resources on internal customizations like IT hardware and environmental controls.
Furthermore, the use of pre-manufactured modular components reduces on-site construction costs, shortening timelines while ensuring high-quality installations.
4. Scalability
Powered shell data centers often cater to hyper-growth businesses that need the flexibility for phased expansions. A tenant can initially occupy part of the facility and incrementally lease additional space or energy capacity as their needs evolve.
How Powered Shell Data Centers Are Developed
The development of powered shell data centers falls into three main categories, each tailored to meet varying levels of demand:
1. Full Construction and Customization
The most common approach involves building a complete exterior shell while the interior remains unfinished. The tenant signs a lease for this space and customizes it based on their needs, for example, by adding high-performance cooling and backup power systems.
2. Phased Build-Out
Under this model, construction progresses in stages, aligning with tenant demand. Only portions of the building are prepared for occupancy at a time, ensuring efficiency in capital allocation.
3. Retrofitting Existing Buildings
Some developers repurpose buildings originally designed for other uses (e.g., warehouses) into powered shells. This method can be faster and more cost-effective than constructing new builds, provided the structure meets data center-specific criteria like ceiling height and floor-load capacity.
Development Timeline:
While timelines vary by strategy and scale, developments typically involve:
6-12 months for exterior shell construction, including entitlements and basic infrastructure setups.
3-6 months for tenant-specific electrical, cooling, and IT equipment installation.
Comparison to Turnkey Data Centers
Powered shell data centers are often compared to turnkey facilities, which are fully built and operational upon lease. Here’s a high-level comparison:
Feature | Powered Shell | Turnkey |
Infrastructure | Partial (basic power, connectivity) | Fully operational, ready to use |
Customization | Maximum flexibility | Limited options |
Deployment Time | 9-18 months | 1-2 years |
Capital Costs | Higher upfront investment | Lower upfront, with higher lease rates |
Operational Control | Total control over operations | Minimal tenant involvement |
Ideal Tenants | Hyperscalers, cloud providers, enterprises | Enterprises, colocation providers |
Cost Range | $10-$25 per sq. ft. per year | $100-$200/kW per year |
Who Uses Powered Shell Data Centers?
Powered shell facilities attract a wide range of tenants, such as:
Cloud Service Providers (CSPs) like AWS and Google, who need scalable space for cloud computing.
Colocation Providers, offering facilities to businesses that don’t want to operate their own data centers.
Enterprises with high-demand private cloud requirements.
Telecommunications Providers, setting up infrastructure to support global connectivity.
Cryptocurrency Miners, requiring energy-dense environments to support blockchain operations.
An example of this is AWS’s usage of multiple powered shell properties in Virginia, where their facilities handle over 1 gigawatt (GW) in total power capacity.
Key Players and Market Trends
Global demand for powered shell data centers is growing, fueled by surging cloud adoption, AI workloads, and edge computing requirements. Major players in this space include:
Digital Realty: A leader in this market with its Powered Base Building (PBB) solution.
CyrusOne: Holding over 1.7 million square feet of powered shell space ready for development.
QTS Data Centers: Specializing in powered shells with modular, scalable designs.
Blackstone (through BREIT): Owning large-scale powered shell portfolios in Virginia.
Market Insights:
Leases for powered shells are typically structured as triple-net agreements lasting 10-20+ years.
Annual lease rates range from $10 to $25 per square foot, depending on location.
Development costs for powered shells generally account for 10-20% of the total cost of a fully operational data center.
Final Thoughts
Powered shell data centers are the perfect middle ground for organizations looking for tailored solutions without the burden of full-scale construction. By blending foundational infrastructure with customization opportunities, they allow tenants to create high-performance environments aligned with their goals.
Whether you're a hyperscaler preparing for AI-powered growth or an enterprise seeking greater operational control, LandGate® provides all essential data in site-seeking in today’s fast-evolving digital landscape.
