Net effective rent and NNN / CAM calculator for Vancouver leases

What is net effective rent and why does it matter to an owner in Vancouver?

Net effective rent is what a lease is worth per square foot per year after you subtract the concessions you gave to get it signed. A $38 face rent on 2,500 sq ft with three free months, a $15 per sq ft improvement allowance and a 5% commission over five years nets to about $32 per sq ft, roughly 15% below the headline. Two leases with the same face rent can be worth very different amounts, which is why lenders, appraisers and buyers all look at the effective number.

Gross, net and triple net: the short version

A gross lease has one rent and the landlord pays operating costs out of it. A net lease adds some operating costs on top of base rent as "additional rent". A triple net (NNN) lease passes through the three big ones: property tax, building insurance and common-area maintenance (CAM), often with a management fee recovery. Most Metro Vancouver office, retail and industrial leases are net leases. The "recoverable" toggle switches between the two worlds: on a net lease the tenant pays additional rent and it does not touch your effective rent; on a gross lease those costs come out of your pocket and the calculator deducts them. The wording that makes a lease net or gross is covered in our guide to commercial lease types in BC.

How the calculator works

Each year's rate is the year-1 rate escalated either by a percentage compounded annually or by a fixed dollar step. Face base rent for the year is rate × size. Free rent is applied to the first months of the term at that year's rate. Total face rent minus free rent is the net base rent. From that we subtract the improvement allowance (rate × size, a one-time cheque) and the commission (your percentage of total face rent) to get the net to the landlord over the term. Divide by size and years and you have net effective rent per square foot per year; divide by months and you have the monthly figure. The tenant tiles show year-1 base rent plus additional rent plus 5% GST, which is the number a tenant compares between listings.

What it costs

The concession lines are the cost of doing the deal. In Metro Vancouver, free rent of one to three months on a five-year term is common, improvement allowances range from nothing on a clean industrial bay to $20–40 per sq ft on office space that needs a new layout, and leasing commissions are commonly 4–6% of total lease value or about one month's rent per year of term (published rate cards from Metro Vancouver managers, 2025–26). Commercial property management fees typically run 3–8% of gross collected rent from the same sources, and in a net lease the management fee is usually recoverable as part of additional rent, which is why the tool includes a management-fee line. David's leasing fee is typically the first and last months' rent on the lease, and ongoing management is quoted per property; details are on commercial property management fees in Vancouver and commercial leasing services.

How long it takes

Negotiating from offer to lease to a signed lease typically takes two to six weeks in Metro Vancouver once the business terms are agreed, longer if the tenant's lawyer marks up the landlord's form. Build the fixturing period into your cash-flow planning: rent often starts 30–90 days after signing while the tenant builds out, and that gap is separate from any free-rent months.

Vancouver specifics

• GST applies to commercial rent; PST does not. Charge 5% on base and additional rent. Most tenants recover it as an input tax credit, so it rarely affects the negotiation, but it belongs on the invoice.
• Property tax is the biggest additional-rent line. City of Vancouver Class 6 (business) tax was about 1.05% of assessed value in 2025 (check the current mill rate). On a $3 million assessment that is $31,500 a year, or $12.60 per sq ft on a 2,500 sq ft unit before any other cost.
• The Commercial Tenancy Act (RSBC 1996 c.57) governs BC commercial tenancies. It says little about CAM, so the lease wording on what is recoverable, capped and reconciled does the work. Have a lawyer review it.

Use the lease rate estimator to set the face rate from live comparables, then this tool to test the concessions, and the vacancy cost calculator to see whether a richer package that signs sooner beats a leaner one that waits. Our portfolio includes an 86,249 sq ft industrial site in Delta leased on a five-year term, the kind of deal where a small change in escalation moves the effective rent by six figures. Weighing a sale instead? See sell or tenant.

General information, not legal, tax or accounting advice. Additional rent figures are estimates until reconciled. Confirm GST treatment with your accountant (CRA) and lease terms with a lawyer.