What to Look for in a Commercial Lease Before You Sign — or Renew
Most business owners spend more time picking out office furniture than they do reading their commercial lease. That’s understandable — lease documents are long, dense, and written in language that doesn’t exactly invite careful reading. But what’s buried in those pages can have a significant financial impact on your business for years to come.
Whether you’re reviewing a lease you’re already in, weighing whether to renew or relocate, or evaluating a new space entirely, knowing what to look for puts you in a far stronger position. Calgary’s commercial real estate market has shifted in ways that give tenants real leverage right now — but only if you understand what you’re working with.
Here are five areas of your commercial lease that deserve close attention.
Lease Expiry Date and Term Length
The length of your lease should reflect where your business actually is — not where you hope it will be, and not where it was three years ago.
For startups or companies in a growth phase, a shorter-term lease offers flexibility. If you expand faster than expected, you’re not locked into a space that no longer fits. For established businesses with stable headcount and predictable cash flows, a longer-term lease often makes more sense. You get rate certainty, stronger negotiating power, and the ability to invest in the space without worrying about a move disrupting everything in two years.
Before signing, make sure the lease term aligns with your current business plan — not just the one you had when you started looking.
Operating Costs and Additional Fees
The base rent number in a commercial lease is rarely the number you’ll actually pay each month. Most commercial leases include additional costs on top of base rent — property taxes, building insurance, maintenance, and common area fees among them. These are typically referred to as operating costs or additional rent.
Read this section carefully. Look for line items that might not be immediately obvious: janitorial services, HVAC maintenance, parking, after-hours access fees. Some of these are standard. Others are negotiable. Understanding exactly what you’re responsible for — and what the landlord covers — prevents surprises later and gives you a more accurate picture of your total occupancy cost
Restoration Clauses
When your lease ends, what condition are you required to leave the space in? This is what restoration clauses govern, and they vary significantly from one lease to the next.
Some leases require tenants to return the space to its original condition — which could mean removing custom built-ins, restoring walls, or reversing any modifications made during the tenancy. Others are more flexible. The difference in cost between a minimal restoration requirement and a full one can be substantial, particularly if you’ve made significant changes to the space.
If you’re weighing whether to relocate, the restoration obligations in your current lease are part of the financial equation. Review them before you make a decision either way.
Renewal Options and Key Dates
Most commercial leases include renewal options, but the details matter more than the fact that they exist. What rate applies at renewal? When do you need to give notice — and to whom? Renewal notice windows in commercial leases can range from one month to twelve months ahead of the expiry date.
Missing that window can be costly. In some cases it means accepting whatever renewal terms the landlord offers. In others, it triggers an automatic extension you didn’t intend. Put every key date from your lease into your calendar the moment you sign, with reminders set well in advance.
Automatic Renewal Clauses
This is the one that catches tenants off guard most often. Many commercial leases contain an automatic renewal clause — language that essentially says the lease will renew for another full term unless you provide written notice to the landlord within a specific window before expiry.
A typical version might read: the lease renews for a further five-year period unless written notice to vacate is given no earlier than twelve months and no later than six months before the expiry date. If that window passes without action, you’re locked in — sometimes at rates explicitly set to be no lower than the final year of the original term.
Read this clause carefully. Even if you plan to stay, understanding the renewal rate conditions and notice requirements gives you room to negotiate rather than simply accepting what’s already written.
Bedrock Realty Advisors represents tenants exclusively in Calgary’s commercial real estate market. If you have a lease you’d like reviewed, we offer a free lease review with no out-of-pocket cost to you. Contact us to get started, or explore our Real Estate Resources for more guidance on office relocation costs and negotiating commercial leases in Calgary.