Commercial rent and TMI: find the real occupancy cost

At a glance: confirm whether the rate is annual or monthly, base or gross, and on what area. Then add additional rent (TMI), HST and separately billed costs. For a daycare, clinic, restaurant or warehouse, those details decide whether a location fits the business.

The advertised rent is only one part of the decision

A listing quoting “$20 per square foot” does not describe the full cost of occupying the space. First confirm whether the figure is annual or monthly, whether it is base or gross rent, what area is being charged, and which additional costs apply.

What TMI means

TMI usually refers to taxes, maintenance and insurance. The lease decides which expenses are charged, how your share is calculated and how adjustments work.

Utilities, repairs, waste, management fees or common-area costs may be included in additional rent or billed separately. Do not assume two listings include the same things because both say “TMI.”

Turn annual rates into monthly cash

Illustrative space (arithmetic only, not a current listing or market rate):

Input	Example
Rentable area	6,000 sf
Annual base rent	$20 / sf
Annual additional rent (TMI)	$8 / sf

Base rent: 6,000 × $20 ÷ 12 = $10,000 / month
Additional rent: 6,000 × $8 ÷ 12 = $4,000 / month
Combined: $14,000 / month before HST and excluded costs.

Where 13% Ontario HST applies to the invoice, the cash payment becomes $15,820 before those other costs. Whether the tax is recoverable is a separate question for your accountant.

Ask what changes during the lease

• Which expenses are recoverable from the tenant?
• How is your share calculated?
• Are estimates reconciled to actual costs each year?
• Are administration charges added?
• Which repairs or capital costs could become your responsibility?

Base-rent increases and additional-rent changes are separate. Budget for both.

“Rent free” needs a precise definition

A free-base-rent period may still leave additional rent, utilities and insurance payable. Confirm when it starts: possession, fixturing, opening and rent commencement can be different dates.

Check the premises can support the business

A cheap unit becomes expensive if the zoning, servicing or layout does not work. Before treating it as an option, confirm zoning and approvals, electrical capacity, ventilation, loading, parking, accessibility and any licensing requirements. For a daycare, premises and licensing are separate checks; for food, a previous food use does not mean your operation can open as-is.

Compare locations on one worksheet

For each candidate, record rent, additional rent, excluded monthly costs, build-out budget, deposits and a working-capital reserve. BDC recommends budgeting the full occupancy cost and planning for increases over the lease term.

Read next: How to open a business in the GTA: premises first

Illustrative calculations and general premises guidance. The signed lease governs; confirm costs and obligations with the landlord and your lawyer and accountant. Inderpal Sidhu, Salesperson · HomeLife Silvercity Realty Inc., Brokerage.

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Inderpal Sidhu, Salesperson · HomeLife Silvercity Realty Inc., Brokerage. Not intended to solicit properties or clients already under contract with another brokerage.