Choosing a commercial tenant: compare the whole proposal

1. Set the property requirements first

Write down what the premises can support and what needs investigation. Consider access, loading, building services, neighbouring occupiers and any proposed alterations. Have the permitted use and relevant approvals checked. A promising proposal still needs to work in the actual space.

Distinguish your essential requirements from preferences. For example, keeping a particular access route clear may be essential to the building, while a preferred possession date may be negotiable. That separation helps you compare proposals without changing the criteria each time a new prospect appears.

2. Understand who will occupy and sign

Ask for a clear description of the intended business and the proposed tenant entity. Discuss who will operate from the premises and who will be responsible under the documents. Have your advisers identify appropriate financial information, references and any proposed security for review.

Request relevant information consistently and handle it confidentially. A recognisable trading name does not answer every question about the contracting entity or its obligations. Conversely, a newer business should be assessed on its actual proposal and supporting information rather than assumptions about its name or presentation.

3. Put the terms into one comparison

Use the same headings for each proposal: base rent, other amounts payable, term, incentives, landlord work, tenant work, access, intended commencement, renewal requests and conditions. Record missing information as unknown instead of filling the gap with an optimistic assumption.

The City of Vancouver's commercial lease negotiation guide identifies renewal and termination provisions among the terms to examine. Have a commercial leasing lawyer explain the effect of the proposed wording. A summary sheet helps organise the decision but does not replace the agreement. City of Vancouver: Commercial Tenant Resource Guide — Lease Negotiation.

4. Compare commitments as well as income

List what the landlord would spend or provide before and during occupation. Consider proposed works, professional costs, any rent concessions and responsibilities for ongoing items. Have the cash-flow comparison prepared on a consistent basis, without treating an advertised rent as the amount the owner will retain.

Illustrative example: one prospect offers a higher base rent but asks for extensive landlord-funded work. Another proposes less work and a different rent. Before choosing, compare the cost, uncertainty, building impact and documentation of each package. There is no automatic winner from the rent figure alone.

5. Resolve the open questions before acceptance

List each unresolved issue, who will investigate it and what information would change your decision. Obtain advice before signing a proposal or letter of intent; the label alone should not be relied on to determine whether obligations arise. Keep proposed commitments distinct from approved ones.

Once terms are settled, build a handover plan covering approvals, insurance, access, works and communication. The objective is a tenancy the parties understand and the property can support. Keep the comparison and final documents together so the reasoning remains clear after occupation.

Sources and further reading

• City of Vancouver: Commercial Tenant Resource Guide — Lease Negotiation

General information for commercial property decisions in Metro Vancouver and the Fraser Valley. Confirm property-specific requirements with the appropriate legal, financial and technical advisers.