Raw Space vs. Built-Out Retail: Which Is Right for Your Business?

🔍 Raw Space vs. Built-Out Retail: Which Is Right for Your Business?

When looking for a commercial space, tenants are often faced with a key decision: should you lease a raw shell space, or opt for a pre-existing retail unit that needs some upgrades? At JR Mercantile Real Estate Advisors Inc., we guide tenants through this decision every day—and while there’s no one-size-fits-all answer, there are important considerations that can help you make the right choice for your business.

🧱 What Is a Raw Space?

A raw (or “shell”) space typically refers to a unit that has no interior finishes—think exposed concrete floors, no ceiling tiles, unfinished walls, and minimal mechanical, electrical, or plumbing systems installed. While it may seem daunting, a raw space offers a blank canvas for businesses that want to fully customize their layout, branding, and experience.

✔️ Advantages:

• Complete design freedom tailored to your business.
• Brand-new systems installed exactly how you need them.
• May be eligible for tenant improvement (TI) allowances from the landlord.

⚠️ Considerations:

• Higher upfront costs for design, permits, and construction.
• Longer timeline before opening—especially if city approvals are required.
• You’ll need to manage a full build-out or hire professionals to do so.

🛠️ What About Pre-Built or Light-Reno Retail Spaces?

These spaces were previously occupied and may already have key infrastructure in place—such as plumbing, HVAC, washrooms, flooring, and lighting. However, they may still require cosmetic or functional upgrades to meet your business needs.

✔️ Advantages:

• Lower renovation costs compared to starting from scratch.
• Faster move-in timelines—ideal if you need to open quickly.
• Often comes with some existing value, like electrical panels, HVAC, or kitchen rough-ins.

⚠️ Considerations:

• Limited layout flexibility, depending on what’s already built.
• May need to work around legacy infrastructure not ideal for your use.
• Risk of underestimating reno costs if major upgrades are needed.

🤔 So, Which Is Better?

It depends on your business model, timeline, and budget. Here are a few guiding questions:

• Do you have a specific design or layout requirement? → Consider raw space.
• Do you need to open quickly and conserve capital? → Consider built-out with light renovations.
• Are you eligible for a tenant improvement allowance? → This may make a raw space more viable.
• Is the existing space close to your desired layout? → Minor renovations may be the most cost-effective.

🏢 How JR Mercantile Helps

At JR Mercantile Real Estate Advisors Inc., we specialize in helping tenants understand the true costs, timelines, and suitability of each option. We’ll connect you with designers, contractors, and the right landlords to ensure you make an informed choice and avoid costly surprises.

Whether you’re exploring a shell space in a new development or considering reimagining a previously loved storefront, our team is here to help you find the right fit.
📍 Explore listings and insights at JRmercantile.com

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