In this guide
The short answer
Leasing usually makes sense when you want flexibility, need to keep cash for equipment and growth, or aren't sure how much space you'll need in a few years. Buying makes more sense when your business is stable, you plan to stay put for a long time, and you have (or can raise) a meaningful down payment.
Many businesses lease first, then buy once they know exactly what they need.
How industrial leases usually work
Most industrial leases in the Lower Mainland are net leases. You pay a base rent, usually quoted per square foot per year, plus additional rent (sometimes called operating costs or CAM) that covers your share of property taxes, building insurance and maintenance. When you compare spaces, compare the total of the two, not just the base rent.
- Term: industrial leases are commonly several years long, often with options to renew.
- Deposit: landlords typically ask for a deposit and may want a personal guarantee, especially from newer businesses.
- Improvements: who pays for office build-outs, power upgrades or racking is negotiable.
What buying involves
Buying an industrial building or a strata industrial unit gives you control, protects you from rent increases, and builds equity over time. In exchange, it ties up capital and makes it harder to move if your needs change.
- Commercial lenders usually expect a larger down payment than for a home purchase.
- You take on property taxes, insurance, repairs and, for strata units, strata fees and rules.
- Some owners buy through a separate holding company and lease the space back to their operating business. Ask your accountant whether this fits you.
Questions to ask yourself
- How confident am I about my space needs three to five years from now?
- Would the down payment be better spent on equipment, staff or inventory?
- How long do I plan to stay in this area?
- Can my business handle unexpected building repairs?
What to check either way
- Zoning and permitted use for your type of business
- Loading doors (dock vs grade-level), truck access and turning room
- Clear ceiling height and floor load
- Electrical service for your equipment
- Parking and yard space
- Total monthly or annual cost, including additional rent or ownership costs
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