Key points
- Most GTA industrial leases are net leases: tenants pay base rent plus a share of taxes, insurance and operating costs.
- Compare offers on total occupancy cost over the full term, not base rent alone.
- The offer to lease sets the key business terms; the formal lease follows and should be reviewed by a lawyer.
- Landlords and tenants each benefit from representation focused solely on their side.
How industrial leases are typically structured
Industrial leases in the GTA are commonly net (often called “net” or “triple net”): the tenant pays base rent plus additional rent, which typically covers a proportionate share of realty taxes, building insurance and common-area or operating costs. Who pays for roof, structure and major systems varies by lease and is a major negotiating point. Rent is usually quoted per square foot per year.
The process, in sequence
- Requirement — size, specifications, location, budget and timing.
- Canvass — identify available and soon-to-be-available spaces, including those not widely marketed.
- Tour and shortlist — evaluate fit and the cost of any required improvements.
- Offer to lease — negotiate the business terms: rent, term, inducements, deposit, conditions.
- Lease document — the full legal lease, reviewed by your lawyer.
- Occupancy — fixturing period, improvements and move-in.
For tenants: what to think about
- Total occupancy cost — base rent plus additional rent, utilities and your fit-out costs, over the full term.
- Term and flexibility — renewal options, expansion or contraction rights, and assignment/sublet rights if the business changes.
- Use clause — make sure the permitted use covers what you actually do, and that zoning allows it.
- Inducements — free rent, fixturing periods and landlord work or allowances.
- Repair and restoration — what you must maintain, replace, and restore when you leave.
- Building specs — loading, power and clear height that match operations for the full term.
For landlords: what to think about
- Tenant covenant — the financial strength behind the lease, and whether security or guarantees are appropriate.
- Use and risk — how the tenant's operation affects the building, insurance and environmental exposure.
- Net effective return — headline rent minus inducements, leasing costs and downtime.
- Lease terms — recoveries, repair obligations, rent escalations and end-of-term restoration.
- Positioning — how the space compares to competing options and what improvements, if any, improve marketability.
Subleases and renewals
Subleasing can be a fast route to space — or a way for a tenant to shed surplus — but it carries its own constraints, including landlord consent and the head lease terms. Renewals deserve the same rigour as a new deal: begin well before the notice deadline so you have real alternatives to compare against.
Meshesha represents either landlords or tenants on a given transaction. Discuss your lease.
General information only — not legal advice. Have every lease reviewed by a lawyer.