What to Consider When Leasing Commercial Property in Ontario?
Learning what to consider when leasing commercial property in Ontario is a significant commitment. It requires careful consideration. Whether you are a business owner launching a new project or trying to expand your work, resolving the complexities of commercial leasing can help you make a wise decision.
Bloom Property Management explains what to consider when leasing commercial property in Ontario and the distinctions between long-term and short-term commercial leases.
Location and Accessibility
Location is one of the most important factors to consider when leasing commercial real estate in Ontario. The location you choose has a significant impact on your company's success. Consider your:
Proximity to your target audience
The neighbourhood's accessibility
Parking options
Public transportation
High-traffic areas may have higher rental costs. However, they provide more visibility and possible foot traffic. Check if the location meets your company's long-term growth goals and plan.
Lease Terms and Conditions
It is essential to be aware of the things to keep in mind when leasing commercial property in Ontario when renting commercial real estate.
In Ontario, business leases are subject to specific legal obligations that must be adhered to. Closely read and monitor:
Length of the lease
Possibility of renewal
Rent escalation clauses
Any other costs like utilities
Property taxes
Maintenance charges
Ensure you know everything about your rights and responsibilities and the lease terms.
Property Zoning and Compliance
Before signing a lease, ensure the property is zoned for your intended purpose. In Ontario, zoning regulations specify the permissible uses of property; noncompliance can result in legal issues and cause economic interruptions.
Speak with the local government or a legal professional to ensure the property satisfies all zoning regulations for your type of company. Also, evaluate whether the property complies with construction requirements, accessibility standards, and safety restrictions.
Monetary Considerations
Since leasing commercial real estate entails large financial outlays, it's critical to consider your budget carefully. Consider the base rent and supplemental expenses like electricity, property taxes, insurance, and standard area maintenance (CAM).
Determining if the lease is financially feasible for your company will require a thorough understanding of the overall cost of the tenancy. Consider the possibility of rent hikes over the lease period in your long-term financial planning.
Please read about our residential & commercial lease London, ON.
Long-Term vs Short-Term Commercial Leases
When renting commercial real estate in Ontario, you must choose between a long-term and a short-term lease. Your decision will be based on your company's objectives and specific situation. Each option offers pros and cons.
Long-Term Leases
A long-term lease, usually lasting five years or longer, provides stability and security for your business. It enables you to become known in the neighbourhood, cultivate a devoted clientele, and avoid the unknown that comes with frequent moves.
Long-term leases can offer attractive rental rates and the chance to bargain for customisation or tenant upgrades. However, they also come with a big price tag and might be difficult to maintain if your company's demands alter or market circumstances do.
Short-Term Leases
Short-term leases typically last one to three years and provide more flexibility. They are best for companies that are expanding quickly and could need to move, are testing out new markets, or operate seasonally.
Leases of a shorter duration lessen the chance of becoming locked into a place that might not meet your demands in the future. However, they could have more expensive rental prices and fewer options for personalising the area.
Read about the types of leasing.
The Bottom Line
Learning what to consider when leasing commercial property in Ontario is complicated. It involves carefully weighing several variables. Your company's demands, objectives, and risk tolerance will determine whether you choose a long-term or short-term lease. By carefully weighing these factors, you can make an informed decision that helps your company succeed and expand in Ontario's cutthroat market.