What does commercial space actually cost?

$22/SF may mean $22 per square foot per year. For 1,500 square feet, that would be $33,000 per year or about $2,750 per month in base rent.

Do not assume. Verify the rate, area, measurement basis, payment frequency, escalations and other applicable charges.

Depending on the lease, additional rent may include property taxes, building insurance, common-area costs, snow removal, landscaping, property management, repairs, maintenance, common-area utilities and other operating expenses.

Ask what is included, how it is calculated, whether it can change, how often it is reconciled and what information is provided.

Terms such as Gross Lease, Net Lease, Double Net, Triple Net and Modified Gross may be used in the market. The actual lease wording determines the rights, responsibilities and costs of the parties.

Ask what the tenant pays, what the landlord pays, what can change, what is reconciled and what remains the tenant's responsibility.

Usable area, rentable area, premises area, common-area allocation and other measurement approaches may appear in commercial leasing.

Where area materially affects cost, verify the area and methodology being used.

Initial term, commencement, expiry, rent changes, renewal options, early-termination rights if any, growth and relocation plans all matter.

Free rent does not necessarily mean free occupancy. Additional rent, utilities, insurance and other costs may still apply depending on the agreement.

Walls, offices, flooring, electrical, plumbing, HVAC, washrooms, lighting, accessibility, specialized equipment and signage can materially change the business decision.

A landlord contribution is not the same thing as free construction. Understand the amount, eligible work, approvals, payment timing, documentation, ownership and treatment at lease expiry.

Landlord approval does not automatically establish that a use satisfies municipal land-use, development, building, fire, health, licensing, parking, accessibility or other requirements.

Consider customers, employees, accessible parking, loading, truck access, snow storage, restrictions, building and pylon signage, and how the property works during actual operating hours.

Deposits, personal or corporate guarantees, letters of credit and other security may be requested depending on the transaction.

Assignment, subletting, repairs, maintenance, utilities, insurance and GST can all materially change rights, risk and complete cost. Review the actual lease and obtain appropriate advice.

Occupancy cost can include base rent, additional rent, utilities, insurance, maintenance obligations and other lease-related costs.

Business cost can include tenant improvements, equipment, furniture, technology, signage, moving, licensing and professional services.

Leasing can offer lower initial capital and flexibility, but it also creates lease restrictions and no ownership equity.

Buying can offer control, equity and long-term occupancy, but financing, capital, property responsibility and future sale risk matter. The right answer depends on the business plan, time horizon, available properties, risk tolerance and opportunity cost.

Compare size, layout and condition; customers, employees, access and logistics; complete cost; term, escalations and responsibilities; building systems and future suitability; and the business's growth and operational needs.

Start by clarifying what the business does, how much space it needs, where it needs to be, what the space must have, the timeline and whether the business may grow or change.