Commercial lease types in BC: gross, net and triple net

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.

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.

Check the units before comparing listings. For a quote stated in dollars per square foot per year, monthly rent is annual rate × rentable square feet ÷ 12. Add base and additional rates first only when both are annual, use the same area, and are separate charges. A monthly dollar quote should not be divided by 12 again.

Hypothetical example: 2,000 rentable sqft × ($30 base + $12 additional rent) ÷ 12 = $7,000 per month, before applicable tax and separately charged items. This assumes a full year at unchanged rates and no concessions; it is arithmetic, not a Vancouver market quote. If a gross quote already includes those operating costs, adding TMI again would double-count them.

What does TMI include?

TMI means taxes, maintenance and insurance. MPAC's commercial terminology uses it for operating recoveries; that Ontario definition is not a BC contract. Ask what this landlord's quote includes and read the lease's cost-recovery clauses. TMI is neither a universal BC formula nor permission to recover every expense without limit. Utilities, management fees, repairs and capital items need specific checking. BDC's leasing glossary explains how gross, modified-gross and net structures allocate costs differently.

Get these details in writing before comparing quotes

• Is each rate annual or monthly, and base rent or total rent?
• What rentable area and measurement basis does it use?
• Which year does the additional-rent estimate cover?
• Which utilities or other costs are billed separately or paid directly?
• How are actual costs reconciled, with what supporting records?
• Are applicable taxes included or extra?

The conversion works across BC; the building, municipality and estimate year change the inputs. Compare Kitsilano street retail, North or West Vancouver office/retail, and Victoria or Nanaimo space against their own local comparables. For North Vancouver, confirm whether the address is in the City or District before checking municipal charges.

Test concessions in the net effective rent calculator. The lease rate estimator uses a September 17, 2026 asking-listing benchmark; check its date and coverage rather than treating it as a current achieved-rent valuation.

This separate hypothetical example converts a $22 base rate plus $8 additional rent into monthly payments, assuming the landlord charges 5% GST. These figures are not a market quote and exclude separately paid costs. Change any of the inputs in the net effective rent calculator to add free rent, an improvement allowance and annual escalations.

Request itemized written quotes for leasing, management and legal work. For a percentage-based commission, confirm whether the basis is base rent or another defined amount, the term counted, payment timing, taxes and any renewal commission. A fee expressed as months of rent is a different calculation; compare the actual dollars using the same assumptions. David quotes leasing and management work per property; see commercial property management fees. Agree a realistic timetable for marketing, due diligence, legal review, permits and possession rather than assuming a standard completion period; see how to find a commercial tenant.

• Use the actual property tax bill. Confirm the current year's total levies and the allocation permitted by the lease, including the agreed area or proportionate share. A general municipal tax rate alone may not represent the property's total bill. Check the property's municipality and any reconciliation against supporting documents.
• Industrial concessions depend on the deal. Assess the space's condition, permitted use, tenant's work and comparable offers. Agree any improvement allowance or fixturing period in writing, including which charges continue; do not assume an industrial owner can avoid concessions.
• 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.