Triple Net and Additional Rent on Canadian Leases: The Number on the Sign Was Never the Number

The listing said a number per square foot. It felt manageable. It was also, quietly, only part of what you’ll actually pay. Canadian commercial leases split the number in a way the listing never shows.

The gap the listing doesn’t mention

There’s a structural reason why quoted rent is lower than what you actually pay. Under a triple net lease — one of the most common structures for retail and industrial space — the advertised figure is usually just the base rent. On top of it sits “additional rent,” a separate charge covering costs the landlord passes through to tenants rather than absorbing themselves. The base number was never the whole number. It was one line of several.

What additional rent actually is

So what is additional rent on a Canadian commercial lease? In practical terms, your share of the property’s taxes, insurance and common area maintenance — everything from snow clearing to landscaping to the property manager’s own fee — allocated across tenants, usually by the proportion of the building each one occupies. It’s sometimes bundled under the shorthand TMI. And what does TMI mean on a Canadian lease? Taxes, maintenance and insurance — the three categories most commonly rolled into that additional-rent line.

Doing the arithmetic properly

The question, then: how do you work out the true cost per square foot? Add the base rent to the additional rent rather than glancing at the base figure and stopping there. A landlord’s marketing material will always lead with the smaller number, because it’s the more attractive one — the honest total is base plus additional, and asking for that combined figure, in writing, before you sign anything, is the single most useful question a new tenant can ask.

What surprised me, translating this from home

Coming from a market where you’re used to thinking in rand per square metre, with a landlord conversation that bundles most of this into one negotiated figure, the Canadian net-lease convention takes some getting used to. It isn’t that one system is more honest than the other — it’s that the Canadian one splits the number into pieces, and each piece needs asking about separately — what’s included, what isn’t, how it gets adjusted each year. Nobody hands you that breakdown unprompted. You have to ask for it.

Why the additional rent line isn’t fixed either

The additional rent figure isn’t static for the life of the lease — property taxes move, insurance premiums move, maintenance costs move, and most triple net leases pass those changes on to tenants annually rather than locking in one number for the whole term. Budgeting for exactly what you paid in year one, and assuming year three looks the same, is its own quiet way of underestimating occupancy cost.

What I’d tell someone about to sign

Before you commit to a space based on the advertised rate, ask the landlord or leasing agent for the full estimated additional rent for the current year in writing, and ask how it’s calculated and how often it’s reconciled against actual costs. Then add it to the base rent yourself. That’s the number that belongs in your budget — not the one on the sign.

Cape2Canada’s guides stay focused on the immigration side of the move; for the lease math itself, a commercial real estate lawyer or leasing agent in your own province can walk you through the actual figures on the space you’re looking at.