Commercial for Lease

Navigating the world of commercial real estate for lease opens doors to a myriad of opportunities. Whether you’re launching a new business, expanding operations, or seeking a strategic location, finding the right commercial space is crucial. Vancouver, a city known for its entrepreneurial spirit, offers a diverse range of commercial spaces for lease. From chic offices in vibrant districts to spacious retail venues in bustling neighbourhoods, the options are as varied as the city itself. Explore the flexibility, amenities, and strategic advantages that come with leasing commercial real estate in Vancouver. With its thriving economy and multicultural atmosphere, Vancouver provides an ideal backdrop for businesses to flourish. Seize the chance to elevate your enterprise in this dynamic city scape.

Are you new to buying a Metro Vancouver BC Commercial Real Estate Property for Lease? Buying a Metro Vancouver BC Commercial Real Estate Property for Lease as an investment is attractive for many people. If you’re considering that, here are some vocabulary and terms used in Commercial Real Estate you should be familiar with.

Abandonment – A person or entity that leaves a demised premises before the end of a lease term.
Additional Rents – These are rents charged to a tenant for the maintenance, taxation, and insurance of any common areas.
After tax yield – This is the annual profit remaining after payment of income taxes, or the annual return on equity after payment of income taxes.
After tax yield rate – The annual rate of return on equity after payment of income taxes.
Anchor tenant – A prominent tenant occupying a large proportion of a commercial property and attracts customers and other tenants to the property.
Assessment – This is a levy against a property in addition to general taxes, and it is usually applied by a civic authority for improvements such as streets, sewers, etc.
Basic rent – This is the rent agreed to through negotiation and does not include adjustments and additions.
Capital improvements – These are additions to the property or improvements that enhance or extend the useful life of the property.
Capitalization – This is the anticipated stabilized rate of return from an investment. Also known as the cap rate.
Cash flow analysis – A projection of the buyer’s estimated cash flow over the holding period.
Escalation clause – A clause in a lease providing for an increase in rent at a future time. This could be a fixed or pre-determined rate increase, or a cost of living increase that ties the rent to a cost of living index, or direct expense – the rent is adjusted according to changes in the expenses of the property such as a tax increase.
First right of refusal – An option in a lease provided to a tenant in a lease contract providing first right to occupy space or match an incoming offer on adjacent space that may be required for the tenant’s future expansion.
Graduated lease – A lease that details for changes in the rental rate, usually based on periodic appraisal or time.
Gross lease – A lease where the tenant pays all or part of the expenses of the leased property, such as taxes, insurance, maintenance, utilities, etc.
Gross rent multiplier – Sales price or value divided by annual effective gross income. For example if sale price is $325,000 and the effective gross annual income is $50,000 the G.R.M. is 6.5 ($325,000 /$50,000).
Gross up area – It is the space leased but not occupied by the tenant, usually for areas as washrooms, lobby area and utility centres.
Lease – A contract where one party (the landlord) agrees to allow another party (tenant) the exclusive, common and/or joint right(s) to use a property for a specific period of time.
Lease buyout – When a landlord offers to take over the current lease of a tenant.
Leaseback – A transaction where an investor purchases property and then leases it back to the seller.
Lessee – The tenant, or the party a property is rented to.
Lessor – The landlord, or the one who rents the property to another.
Letter of intent – A formal method of stating there is interest in a property, but it is not an offer and creates no obligation.
Negative cash flow – When the income from an investment property does not equal the usual expenses. The owner must come up with cash each month to meet these expenses.
Net income – The difference between effective gross income (property) and the operating expenses including taxes and insurance. The term is qualified as net income before debt service.
Net lease – A lease requiring the tenant to pay, in addition to a fixed rental, the expense of the property leased, such as taxes, insurance, maintenance etc.
Net operating income – Also known as NOI. This is the annual net income remaining after deducting all fixed and operating variable expenses, but before debt service and income tax. The specific formula is: NOI = Scheduled rental income + other income – vacancy and credit losses – operating expenses.
Net rent multiplier – The factor resulting from dividing the net operating income into the sale or purchase price.
Net rentable area – Also known as net rentable square feet. This is the total amount of square feet that can be used for rental income. It typically excludes stairways, elevators, hallways, common areas, etc.
Net-net lease – A lease in which the tenant pays a rent to the landlord that includes all real estate taxes only and does not include any portion of the operating expenses.
Net-net-net lease – Also known as a triple net lease, when the tenant pays rent to the landlord that does not include all property taxes and operating expenses.
Non-conforming use – Property used for purposes that do not conform to the permitted uses in the municipal or provincial zoning by-laws.
Option – The right to purchase or lease a property at a certain price within a designated period of time for which a consideration is paid.
Vacancy rate – The percentage of total scheduled rental income lost to vacancy and bad credit costs.
Yield – This is the ratio of income from an investment to the total cost of the investment over a given period of time.
Zoning – The rules of a municipality that detail the allowable uses for the real property in specific areas, and only then on specified conditions.