One of the most common surprises for industrial tenants is the gap between the rate they were quoted and the cheque they write each month. The asking number is rarely the whole story. Understanding how commercial rent is structured is the first step to negotiating it well.
Net rent vs. additional rent
Most industrial leases in the GTA are structured on a net basis. That means your rent has two main components:
- Net rent — the base rate quoted per square foot, paid to the landlord as return on the space itself.
- Additional rent — your proportionate share of the building's operating costs, commonly called TMI.
What TMI actually covers
TMI stands for Taxes, Maintenance, and Insurance — the recoverable costs of operating the building, passed through to tenants based on the share of the building you occupy. It typically includes property taxes, common-area maintenance, building insurance, and management fees. Your all-in occupancy cost is net rent plus TMI — not net rent alone.
A low net rent paired with a high or poorly controlled TMI can cost more than a higher net rent with a tight, transparent operating budget.
To put real numbers on it: across the GTA as of Q1 2026, average net asking rent is roughly $16.49 PSF. Additional rent (TMI) typically runs in the $4.00–$4.60 PSF range depending on the submarket, adding roughly a quarter on top of the headline rate — which is exactly why your all-in number, not the quoted net rent, is the figure that matters.
Where to look before you sign
- Ask for the TMI breakdown. A credible landlord can show you what makes up the figure and the recent trend.
- Check the escalation language. How does net rent step up over the term, and are operating-cost increases capped or fully passed through?
- Confirm what's recoverable. Capital expenditures, structural repairs, and management fees are common negotiation points — some shouldn't land on the tenant at all.
- Model the full term. Project net rent plus TMI plus any improvement costs across every year, not just year one.
The takeaway
Reading a lease isn't about catching the landlord out — it's about knowing your true cost and negotiating the terms that drive it. When you understand the full economics, you can trade thoughtfully: a little more here for flexibility there. That's where representation earns its keep.
GTA rent figures are from Lennard Commercial Realty's Q1 2026 The Q™ Industrial Market Report and will change over time. This article is general educational information, not legal, accounting, or real estate advice for your specific situation. Always have a lease reviewed by qualified professionals before signing.