Insights · Lease
How to Compare Industrial Lease Options.
A practical framework for tenants evaluating competing industrial space for lease in Ontario and Alberta — how to compare total occupancy cost, specification fit, and lease terms across multiple options.
Compare Total Occupancy Cost
Net rent is not
the full picture.
Industrial leases in Ontario and Alberta are almost universally net leases — the tenant pays a base rent plus additional rent (TMI: property tax, building insurance, common area maintenance). Total occupancy cost = net rent + TMI. TMI across Ontario industrial varies from $3–$6/SF/year depending on property tax assessment and landlord operating structure. Always compare total occupancy cost, not just face rent.
The Comparison Framework
Five factors that
determine the right space.
Specification Fit
Clear height vs your racking or equipment requirement. Loading configuration (dock vs grade, number of doors, truck court depth). Power supply in amps. Column spacing vs your operational layout. A space with the wrong spec at a low rent is more expensive than a properly specified space at a higher rent.
Net Effective Rent
Face rent minus the annualised value of any tenant incentives (free rent, TI allowance, landlord's work). Calculate on the same basis for every option. A $32/SF space with 4 months free rent on a 5-year term has a net effective rent of approximately $29.87/SF.
Lease Terms
Renewal option terms and rents. Expansion rights if adjacent space becomes available. Early termination provisions. Assignment and sublease rights. Landlord repair obligations vs tenant repair obligations. These are negotiated at the front end — not after signing.
Location & Access
Distance from your primary labour catchment, proximity to 400-series highways (Ontario) or QEII/Deerfoot (Alberta), access to rail or intermodal if applicable, and local truck route designations. A 20-minute drive time advantage for staff can materially reduce labour cost over a 5-year term.
Landlord Quality
Institutional vs private landlord. Track record of maintenance responsiveness and capital reinvestment. Ask existing tenants in the building or complex. A low-maintenance landlord adds a hidden cost that does not appear in the rent comparison.
Insights · Lease
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