Owner guide · commercial leasing
Commercial lease types in BC: gross, net and triple net
Most Metro Vancouver commercial leases are net leases: the tenant pays base rent plus additional rent for property tax, insurance and operating costs. A $22/sqft net lease with $8/sqft additional rent on 2,500 sqft is $6,250.00 a month before GST ($6,562.50 with it). Terms run 3–5 years, GST applies, PST does not, and there is no standard form.
For private owners of office, retail, industrial and live/work space · 12 min read · Updated September 2026
Worked example
2,500 sqft · net lease
| Base rent$22/sqft/yr | $55,000.00per year | $4,583.33per month |
| Additional rent$8/sqft/yr | $20,000.00per year | $1,666.67per month |
| Total before GST$30/sqft/yr | $75,000.00per year | $6,250.00per month |
| GST 5% | $3,750.00per year | $312.50per month |
Additional rent is the landlord's estimate, reconciled to actual costs after year end. A registered tenant recovers the GST as an input tax credit.
What are the types of commercial lease?
Every commercial lease answers one question: who pays the building's costs? Property tax, building insurance and the cost of running the common areas (CAM or operating costs) have to be paid by someone, and the lease type is just the label for how that is split. This is general information, not legal advice; BC has no standard commercial lease, so the words in your own document decide.
Swipe sideways to see the full table
| Lease type | Tenant pays | Landlord pays | Where you see it in Metro Vancouver |
|---|---|---|---|
| Gross | One all-in rent | Tax, insurance, operating costs, out of the rent | Small office suites, executive suites, short terms, some older buildings |
| Semi-gross (base year) | One rent, plus increases in costs above a stated base year | Costs up to the base-year level | Older office buildings; some strata office |
| Net (single or double) | Base rent plus one or two of tax, insurance, operating costs | The remaining items | Negotiated deals; some industrial with tenant-paid tax only |
| Triple net (NNN) | Base rent plus proportionate share of tax, insurance and CAM/operating costs | Structural and capital items, subject to the lease | The default for retail, industrial and small multi-tenant office |
| Percentage rent | Base rent (often lower) plus a percentage of gross sales above a breakpoint | As per the underlying net or gross structure | Shopping centres, food and beverage, some high-street retail |
| Ground lease | Rent for the land only; tenant builds and owns the improvements for the term | Nothing on the building; landlord owns the land | 20–99 year terms; First Nations lands, institutional and municipal land, some pad sites |
Common BC lease structures. Labels vary by landlord and lawyer; read the cost-recovery clause, not the title.
Base rent vs additional rent: what is actually in the number?
Base rent is the figure quoted in listings, in dollars per square foot of rentable area per year, and it goes to the landlord. Additional rent is the tenant's proportionate share of the building's costs, estimated by the landlord at the start of each year, paid monthly, and reconciled to actual invoices after year end. Tenants budget on the total, so a listing that quotes base rent without an additional-rent estimate gets fewer enquiries.
≈1.05%
Vancouver Class 6 tax rate, 2025
Of assessed value; check the current mill rate. Passed through on net leases
5% GST
On commercial rent
PST does not apply to rent. Confirm with your accountant
3 items
In additional rent
Property tax, building insurance, CAM/operating costs
3–8%
Management fee recovery
Many leases let the landlord include the management fee in operating costs
What goes into operating costs is a negotiation. Typical inclusions: common-area utilities, cleaning, landscaping, snow, repairs and maintenance, security, property management fees, and sometimes a capital or reserve charge. Typical exclusions the tenant will ask for: structural repairs, the landlord's financing costs, leasing commissions, costs recovered from insurance, and capital replacements. The proportionate share is the tenant's rentable area divided by the building's rentable area; on a single-tenant building it is 100%.
GST at 5% applies to base rent, additional rent and most chargebacks; the landlord must be registered and remit it, and a registered tenant claims it back. BC PST does not apply to commercial rent. Confirm your registration and filing with an accountant.
Worked example: a $22 net lease on 2,500 sqft
The card below converts a typical small Metro Vancouver net lease into what the tenant actually pays each month and what the owner actually receives. Change any of the inputs in the net effective rent calculator to add free rent, an improvement allowance and annual escalations, which is what turns a headline rate into the real number.
$22/sqft net + $8/sqft additional rent × 2,500 sqft
Swipe sideways to see the full table
| Line | Rate | Per year | Per month |
|---|---|---|---|
| Base rent (to the landlord) | $22.00/sqft | $55,000.00 | $4,583.33 |
| Additional rent: tax + insurance + CAM (landlord's estimate) | $8.00/sqft | $20,000.00 | $1,666.67 |
| Total occupancy cost before GST (gross equivalent) | $30.00/sqft | $75,000.00 | $6,250.00 |
| GST 5% (tenant recovers if registered) | $3,750.00 | $312.50 | |
| Tenant's monthly payment | $78,750.00 | $6,562.50 | |
| Deposit: first and last months plus GST (common) | $13,125.00 |
Additional rent is reconciled to actual costs after year end; the tenant receives a credit or an invoice for the difference. Over a 5-year term with 3% annual base-rent steps the same lease produces roughly $292,000 of base rent to the owner before commissions and improvements.
The clauses that decide what the lease is really worth
Term and renewal options
Vancouver commercial terms are commonly 3–5 years with one or two 5-year renewal options. The option sets how rent resets: fixed, stated increase, market agreed by the parties, or arbitration. Options usually require the tenant to exercise 6–12 months before expiry and to be in good standing.
Escalations
Fixed steps ($0.50–$1.00/sqft a year) or a percentage (2–3% a year) on base rent. Additional rent floats with actual costs. A five-year lease with no escalation is a five-year discount.
Tenant improvement allowances and free rent
Office landlords in Vancouver commonly offer $10–$40/sqft on 5-year terms depending on condition; retail and industrial are usually as-is with a fixturing period of 1–3 months during which base rent (and sometimes additional rent) is waived.
Deposits and personal guarantees
Not capped like residential. First and last months plus GST is common; more, or a letter of credit, for a new company or a large allowance. A personal guarantee or indemnity from the principals, sometimes limited to the first 2–3 years, is usual for small companies.
Assignment and subletting
Tenants may assign or sublet only with the landlord's consent, usually 'not to be unreasonably withheld'. Keep the original tenant and guarantor liable after assignment; take a share of any sublease profit; reserve the right to terminate instead of consenting.
Demolition, holdover and use
A demolition clause lets the landlord end the lease on 6–12 months' notice with a development permit; tenants discount for it. Overholding sets the month-to-month rent (commonly 125–200%) if the tenant stays past expiry. The use clause should be narrow and checked against zoning.
Which lease type should an owner use?
Gross or semi-gross
Simple for the tenant, risk on the owner
- Best for
- Small suites, short terms, executive office, buildings where costs are stable
- Owner risk
- Tax and cost increases come out of your rent unless a base-year clause catches them
- Pricing
- Quote a higher rate; tenants compare it against net + additional
Triple net (NNN)
The Metro Vancouver default
- Best for
- Retail, industrial, multi-tenant office, any building where costs move
- Owner risk
- Low on costs; the work is in estimating and reconciling additional rent every year
- Pricing
- Quote base rent and a current-year additional-rent estimate together, always
Our leasing and management service prepares the annual estimate and reconciliation for owners.
Percentage or ground
Special cases
- Best for
- Shopping-centre and food retail (percentage); long-term land plays (ground)
- Owner risk
- Percentage rent needs sales audits; ground leases need 20–99 year thinking
- Pricing
- Percentage rent commonly 5–8% of gross sales above a natural breakpoint
What it costs and how long it takes
Getting the lease right costs less than getting it wrong. In Metro Vancouver, leasing commissions are commonly 4–6% of the total lease value or roughly one month's rent per year of term, and commercial property management fees typically run 3–8% of gross collected rent (published rate cards from Metro Vancouver managers, 2025–26). A Vancouver commercial leasing lawyer commonly quotes $2,000–$6,000 to draft or review a lease and $800–$2,500 for a renewal amendment; confirm with your lawyer. From accepted offer to signed lease is usually two to four weeks; from marketing start to accepted offer, 30–180 days depending on asset type (see how to find a commercial tenant). David's leasing fee is typically the first and last months' rent on the lease, and ongoing management is quoted per property; see commercial property management fees.
$0
Cost of a standard BC commercial lease form
Vancouver specifics
- Property tax is the big additional-rent line. The City of Vancouver's Class 6 (business) rate was roughly 1.05% of assessed value in 2025 (check the current mill rate); on a $3 million assessment that is about $31,500 a year, or $12.60/sqft on 2,500 sqft, before insurance and CAM. Suburban municipalities differ; check each.
- Industrial leases are short on allowances. With availability around 3–4% (brokerage market reports, 2025), Metro Vancouver industrial owners rarely need to offer improvements; a fixturing period is the usual concession.
- Demolition clauses cluster on the corridors. Broadway, Cambie, Kingsway, and the transit-oriented areas around SkyTrain stations. Tenants price them in.
- Live/work and mixed-use leases need care on which statute applies to the residential part; see our live/work zoning guide. The buildings we lease and manage now, including the 8,003 sqft Castle Armory & Residence in North Vancouver, are on the commercial portfolio, or contact us.
Owner questions
Have a lease or an offer in front of you?
Send it over with the address. We tell you how the rent, additional rent, term and clauses compare to what we see across Metro Vancouver, before it goes to your lawyer.
David Siccia Properties handles leasing and management. Property sales are executed by Lawrence Siccia, REALTOR®, Engel & Völkers Vancouver.
Related
Guides
Tools
- What should my space lease for?Live asking rates by city and asset type
- Metro Vancouver commercial lease ratesMonthly asking rates by city and asset type
- Vacancy cost calculatorWhat an empty unit costs per month
- Net effective rent calculatorFree rent, TI, escalations, NNN
- Lease expiry plannerA dated plan from your lease end date
- Commercial listing auditWhy a listing gets no inquiries
General information, not legal advice
This guide describes commercial lease structures in British Columbia, the BC Commercial Tenancy Act, and CRA GST treatment as we understand them in September 2026. Every lease is a private contract and the words in yours decide. Confirm the lease with a lawyer and the tax treatment with an accountant before you rely on anything here.