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A lease renewal looks like the easy part of owning a commercial property. The tenant is already there, the space works for them, and nobody has to market anything. That’s exactly why renewals go wrong. They get left too late, priced from habit and signed in a hurry.
Here are the seven mistakes we see most often from Edmonton landlords, and what to do instead.
1. Waiting for the Tenant to Bring It Up
By the time a tenant raises its renewal, it has usually already toured other spaces and knows what it wants to pay. You’re negotiating on its timeline.
Do this instead: read the renewal clause well before the notice window opens. Many leases require the tenant to give written notice within a set window, such as 6 to 12 months before expiry. Put the window and the expiry date in your calendar, and start the conversation first, ideally 12 to 18 months ahead for larger spaces.
2. Setting Renewal Rent From the Old Rent
“Last year’s rent plus a bit” is the most common way to price a renewal, and often the wrong one. Edmonton’s market has moved unevenly:
Industrial vacancy was 2.7% in Q2 2026, and rents are up 3.5% since the end of 2025 (CBRE). Many industrial landlords who renew at old rates are leaving money on the table.
Downtown office vacancy was 20.7% (CBRE, Q2 2026). Older office buildings may need to offer something to keep good tenants.
Retail vacancy was 5.6% citywide (CBRE, 2026). Busy neighbourhood centres can hold firm, while weaker centres have less room.
Do this instead: price the renewal from recent lease deals for similar space nearby, net of the incentives in those deals. If the lease says “market rent,” you’ll need that evidence anyway, especially if it ever goes to arbitration.
3. Comparing Headline Rents
A new tenant offering a higher rent can look like a win. Once you count the cost of getting that tenant in, it often isn’t.
Do this instead: compare net effective rent, the rent you actually earn each year after free rent, improvement allowances and vacancy are spread over the term. Here’s an illustrative example for a 2,000 sq. ft. retail unit on a five-year term. The numbers are made up to show the method.
The new tenant offers $2 more per square foot. Once you count the free rent, the build-out and five months of an empty unit, you earn about $5 less per square foot every year, before leasing fees.
4. Going Into the Renewal With Messy Operating Costs
Tenants often use a renewal to push back on additional rent: their share of property taxes, insurance and common area costs. If your year-end reconciliations have been late, unclear or surprising, expect the tenant to ask for audit rights, caps on increases or a lower share.
Do this instead: send clean, on-time reconciliations in the year before the renewal, with backup for any big changes. Edmonton’s 2026 non-residential tax rate is about $29,266 per $1 million of assessed value, so property tax is often the biggest line. If you think your assessment is too high, look at it before you go into the renewal.
5. Losing the Guarantee
If an individual personally guaranteed the original lease, that guarantee is part of what the lease is worth to you. A guarantor’s liability can end if the lease is changed without the guarantor’s consent.
Do this instead: have the guarantor sign the renewal or extension too. If you’re asking for a new personal guarantee, remember that under Alberta’s Guarantees Acknowledgment Act, an individual’s guarantee generally needs a lawyer’s certificate to be enforceable.
6. Not Checking Who the Tenant Is Now
A tenant that signed five years ago may not be the same business today. It may have new owners, a new line of business or weaker finances.
Do this instead:
Check finances again. Ask for current financial statements, as you would for a new tenant.
Ask about ownership. Find out whether the business has been sold or restructured. Many leases treat a change of control as an assignment that needs your consent.
Check any new use. If the tenant wants to change how it uses the space, confirm the new use is allowed under the zoning. Some uses, like liquor and cannabis stores, have separation distance rules.
7. Letting the Lease Expire Unsigned
When the end date passes and the paperwork isn’t done, the tenant usually stays on under the holdover clause. That’s often month to month, sometimes at a higher rent. Either side can then walk away on short notice, which isn’t a good position for a landlord.
Do this instead: agree on terms and have your lawyer prepare the renewal or extension a few months before expiry. If the lease is being extended past three years, ask whether the registration or the tenant’s caveat on title needs updating.
Why Renewals Matter When You Sell
Buyers and lenders look closely at how much lease term is left. A building with strong tenants on long renewals is easier to finance and usually sells for more. One with several leases ending in the same year makes buyers nervous. If you’re thinking of selling in the next few years, plan your renewals now. See our office, retail and industrial property pages, or our industrial investment property page.
Leasing industrial space yourself? Read our tenant guide: Your Industrial Lease Is Up: Should You Renew, Move or Buy?
Frequently Asked Questions
When should a landlord start lease renewal talks?
Start before the tenant’s notice window opens. For larger spaces, 12 to 18 months before expiry gives both sides time to compare options and agree on terms.
Can a landlord refuse to renew a commercial lease in Alberta?
Generally yes, unless the lease gives the tenant a renewal option. Alberta has no commercial tenancy statute and no automatic right to renew. If the lease has an option and the tenant exercises it properly, the landlord is usually bound by its terms.
Is there a limit on rent increases when renewing a commercial lease in Alberta?
No law caps commercial rent increases in Alberta. Renewal rent is set by the lease, which may fix it in advance or set it at market rent, or by negotiation.
Is it better to renew a tenant or find a new one?
Compare net effective rent. Once you count free rent, improvement allowances and months of vacancy, keeping a good tenant at slightly lower rent often earns more than leasing to a new tenant at a higher headline rent.
Do I need a lawyer for a commercial lease renewal?
It’s a good idea. A lawyer can prepare the right document, either a renewal or an extension, keep any guarantee in place, and handle registration on title.
Need help with a renewal or a vacancy? Contact our team.