Industrial leasing questions, answered

Most industrial leases in the GTA are net leases. The tenant pays base (net) rent plus additional rent, often called TMI (taxes, maintenance and insurance), representing a share of property taxes, building insurance and common-area or building maintenance. Utilities are usually separate. Always confirm exactly what is included in each lease.

Industrial rent in Ontario is commonly quoted per square foot per year on a net basis, with additional rent estimated separately. Comparing options on total occupancy cost over the full term is more meaningful than comparing headline net rates.

Terms vary widely by building, tenant and negotiation. Small-bay units may see shorter terms, while larger buildings or spaces requiring significant landlord investment often involve longer commitments. Renewal and expansion options can add flexibility.

An offer to lease sets out the key business terms, premises, term, rent, deposits, inducements, landlord's work, use and conditions, before a formal lease is prepared. Once accepted and conditions are satisfied, it can be binding, so review by a real estate lawyer is strongly recommended.

A fixturing period gives the tenant early access to the premises, typically before rent begins, to install racking, equipment, cabling and improvements. The tenant usually remains responsible for additional rent, utilities and insurance during this time, depending on the lease.

Timelines depend on size, how specialised your requirements are, availability, conditions such as permits or power upgrades, and negotiation. Starting well before your current lease expires, especially for larger or specialised requirements, gives you more options and leverage.

Not legally, but a listing agent represents the landlord. Your own representative can search the whole market, compare options consistently, coordinate technical reviews and negotiate with your interests as the priority. Services and compensation are set out in a written representation agreement before work begins.

Start from operations: inventory volume, racking height, pallet positions, staging, equipment, production lines, office headcount and growth. Clear height and column spacing affect how efficiently you use the floor area, so the same square footage can perform very differently between buildings.

It depends on your storage method and racking design, as well as the sprinkler system and fire code requirements for the height and type of goods stored. A racking supplier and fire protection professional should confirm what is achievable in a specific building.

Review the municipality's zoning by-law for the property and, ideally, request a zoning review or confirmation from the municipality, or engage a planner. Uses such as outside storage, truck terminals, food processing or hazardous materials are often restricted. Making the offer conditional on zoning confirmation is a common protection.

Power upgrades can involve the electrical utility, new transformers and switchgear, with significant cost and lead time. Have an electrician verify the existing service, obtain estimates, and negotiate in the offer who pays for any upgrade and how timing affects your possession date.

Most leases allow assignment or subletting only with the landlord's consent, often with conditions. Negotiating these rights up front matters if your business may grow, relocate or be sold during the term.

Many leases require the tenant to remove improvements and restore the premises at the end of the term, for example removing racking, cabling or equipment pads. Understanding and negotiating these obligations early can avoid unexpected end-of-lease costs.

Sublease space can offer shorter terms, existing improvements and sometimes faster occupancy. It also has limits: the remaining term is fixed, the original landlord must usually consent, and your rights depend on the head lease.

Verify and document the specs tenants screen for, clear height, loading doors, truck court, power, sprinklers, column spacing, office area, parking and zoning. Service dock equipment, address visible deferred maintenance, and prepare accurate floor plans and photography.

Landlords typically review the tenant's business, financial information and intended use. Covenant strength, the impact of the use on the building, insurance requirements and restoration risk are all relevant, alongside rent and term.

Inducements such as free rent, tenant improvement allowances or landlord's work are negotiated based on the building, the tenant and the term. They are business decisions to weigh against rent, term and covenant, ideally with advice from your lawyer and accountant.

Some buildings can be divided into separate units, which may widen the pool of prospective tenants. Demising involves considerations such as separate entrances, loading, washrooms, metering, fire separations and building permits.

Where zoning permits it, yard space for trailers, containers or equipment is sought after by many users. Permissions vary by municipality and zone, and some uses require site plan or other approvals, confirm before marketing it.

No. No representative can guarantee outcomes. Results depend on the building, market conditions at the time, terms offered and prospective tenants' needs. What a representative can provide is a clear strategy, accurate marketing and diligent negotiation.

Dock-level (truck-level) doors are at trailer bed height so forklifts can load directly into transport trailers. Grade-level (drive-in) doors are at ground level so vehicles or equipment can drive into the building. Many operations need a mix of both.

The truck court is the paved area in front of loading doors where trucks manoeuvre. Its depth determines whether 53-foot trailers can dock efficiently and whether trailers can be staged or parked.

Employment areas are lands designated through provincial, regional and municipal planning policy to be protected for industrial and other employment uses. They generally limit conversion to non-employment uses such as residential.

Some industrial properties have rail spurs, but rail service depends on the spur's condition and the rail carrier's agreement to serve it. Most GTA industrial users rely on truck transport, with intermodal terminals available for container traffic.

Toronto and the Greater Toronto Area, including Mississauga, Brampton, Vaughan, Markham, Scarborough, Etobicoke, Milton, Oakville, Burlington, Caledon and Durham Region.

Compensation arrangements are set out in writing in a representation or listing agreement before services begin, and are discussed openly at the start. Arrangements vary by transaction.

No. Content on this site is general and educational. Every property and transaction is different, and you should obtain legal, tax, engineering, zoning and other professional advice specific to your situation.

Request a consultation through the contact page, or text 647-342-1355. A short conversation about your requirement or building is usually the best first step.