What’s included in TMI?
A triple-net lease (NNN lease) is a common leasing structure for industrial properties within the Greater Toronto Area (GTA), particularly for single-user industrial facilities. Under this lease type, the tenant assumes responsibility for three primary expenses: Taxes, Maintenance, and Insurance (TMI). This means tenants cover not only the base rent but also all associated operational costs related to the property.
Key Tenant Responsibilities under a Triple-Net Lease:
Property Taxes: Tenants pay their proportional share of municipal and other property taxes.
Maintenance: This encompasses all upkeep and repairs of the premises, including structural maintenance.
Property Insurance: Tenants are responsible for insuring the building as specified in the lease.
Additional Expenses: Tenants also bear costs such as:
Personal property taxes on equipment or assets within the leased space.
Janitorial and cleaning services.
All utility costs including electricity, water, gas, and waste disposal.
It is important to note that HST (Harmonized Sales Tax) is charged on the net rent and TMI amounts, impacting the overall cost of tenancy.
Lease Variations and Negotiations:
Lease terms can differ significantly based on duration and tenant requirements. Common lease terms in the GTA industrial market include 3-, 5-, and 10-year leases, where TMI charges may be negotiable depending on lease length and tenant creditworthiness.
Tenants often request additional concessions such as:
Free Rent Periods: Temporary rent abatements to help offset moving or renovation costs.
Tenant Improvements (TIs): Alterations such as painting, new carpeting, or building new walls. These build-outs can influence the overall lease rate since landlords consider the costs associated with customizing the space.
Understanding these nuances is critical when negotiating an industrial lease in the GTA to optimize costs and lease terms.
Why Work with an Experienced Industrial Broker in the GTA?
Navigating triple-net leases and industrial property agreements requires in-depth knowledge of GTA market trends, property costs, and lease structuring. As an industrial broker specializing in this market, I provide expert guidance to ensure tenants and landlords secure favorable terms aligned with their operational and financial goals.
Contact me directly at Jonathan@lennard.com for a personalized consultation on triple-net leases or to explore available industrial properties in the Greater Toronto Area. Let’s work together to find a solution tailored to your industrial leasing needs.