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Nobody wakes up wondering whether to buy a warehouse. The question arrives in an envelope, usually nine to twelve months before your term expires, with a number in it that’s higher than you were expecting.
That’s when business owners start running the math. Here’s how to run it properly — and what the comparison looks like in Edmonton right now.
First: understand the position you’re negotiating from
Edmonton’s industrial market is tight and has been for a while. CBRE put vacancy at 2.7% in the second quarter of 2026 — under 3% for seven consecutive quarters — with availability at 4.5%, a decade low. Rents climbed 3.5% over the first half of the year and another 3.3% in Q3.
The demand is concentrated exactly where most owner-operators shop. Deals of 25,000 square feet or less accounted for 91.2% of Edmonton industrial transactions in Q2 2026.
What that means for your renewal: your landlord knows the market is thin, and knows that moving costs you money and downtime. You have less leverage than you would in a soft market.
It also means something about the alternative. Average asking sale prices are up 7.3% year over year — so buying isn’t cheap either, and the building you want won’t sit around.
Know what you’re actually paying now
Before comparing anything, get your true number. Industrial rent in Edmonton quotes in two pieces, and owners routinely underestimate the second one.
Net rent goes to the landlord. Additional rent is your share of property tax, building insurance and common maintenance — and it moves every year without anyone negotiating it.
Cushman & Wakefield’s Q2 2026 regional averages:
Per square foot per year.
Two things to notice. Acheson is in a different league — roughly 40% above the regional gross. And additional rent varies more than people expect, from $3.76 in Nisku to $6.00 in the northeast. A lower net rent with high additional rent can cost more than the reverse.
Smaller bays also price higher per foot. The clearest size breakdown available is Avison Young’s from 2024: sub-5,000 sq ft units asked $12.00–$12.50 net against $8.25–$9.00 for space over 100,000. Dated, but the shape of it still holds.
Add 5% GST to all of it. Recoverable if you’re registered, but it’s cash flow in the meantime.
The three options, honestly
Option 1: Renew where you are
Cheapest in the short run and by far the least disruptive. No moving costs, no downtime, no rebuilding your power or your racking.
What to push on before you sign:
A renewal option for the next term, with the rate set by a defined mechanism rather than “market.” Alberta has no commercial tenancy legislation comparable to Ontario’s or BC’s — your rights come from the lease document and essentially nowhere else. If your current lease has no renewal right, you had no legal claim to be here at all after the term ended.
The escalation schedule. Annual steps compound. A 3% annual bump over a ten-year term means you finish paying 30% more than you started.
Your personal guarantee. In Alberta a guarantee isn’t enforceable unless a lawyer has gone through it with you and signed a certificate under the Guarantees Acknowledgment Act. If you’re re-signing, this is the moment to ask whether it still needs to be there — after five or ten years of clean payment history, you have an argument.
Have a lawyer read the entire document, not just the page with the new number on it.
Option 2: Move to a different leased space
Only worth it if the space itself is wrong — too small, wrong door height, wrong power, wrong location for your drivers.
Budget realistically for the switch: tenant improvements beyond whatever allowance you negotiate, moving, downtime, new signage, updating every address you’ve ever given a customer. For most small operations that’s a five-figure number before the first month’s rent.
In a 2.7% vacancy market, also budget time. The right bay may not exist this quarter.
Option 3: Buy
This is where the renewal letter sends a lot of owners, and sometimes correctly.
CBRE had Edmonton industrial averaging $181 per square foot at the end of 2025. Owner-users — businesses buying for their own operations — pay more, because they want smaller and newer: Cresa pegged owner-user pricing near $196 per square foot in mid-2025, and it’s risen since.
Condo bays have become the standard route for small businesses. Cresa reported condos made up the majority of Edmonton industrial sales in 2025, with owner-users accounting for 44 of 62 properties sold through that point in the year.
Financing, realistically:
BDC will finance up to 100% of project cost for a business buying its own premises, amortized up to 25 years, with interest-only available for the first 36 months. You’ll need at least 24 months of revenue history.
The Canada Small Business Financing Program covers up to $1,000,000 for purchasing or improving real property, arranged through your bank.
Conventional lenders typically want 25–35% down and underwrite your business’s ability to service the debt.
Closing costs people forget: appraisal ($3,000–$10,000+), Phase I environmental assessment ($3,000–$8,000+), legal ($3,000–$10,000+), and Land Titles at $50 plus $5 per $5,000 of value on both the transfer and the mortgage. On a $1M purchase with a $750K mortgage that’s $1,050 and $800 respectively. GST is usually self-assessed and recovered by a registered buyer rather than paid at closing — confirm with your accountant.
The comparison, run two ways
A 5,000 sq ft bay. Lease at the regional average. Purchase at $205 per square foot — above the $181 average and the $196 owner-user figure, because small newer condo bays are the expensive end of the market and that’s what you’d actually be buying.
Purchase price $1,025,000, 25% down, $768,750 borrowed at 6% over 25 years. That’s about $59,440 a year in payments.
Scenario A — operating costs match additional rent:
Scenario B — property tax assessed at purchase price:
Edmonton’s non-residential rate would put tax alone near $30,000 on a $1,025,000 assessment. Add insurance and maintenance and the owner’s operating costs run closer to $42,000.
Scenario B is the more likely one for a recent purchase, because assessments tend to follow transaction prices. That’s roughly $18,000 a year more in cash — against about $13,700 of equity in year one, rising annually.
So the honest summary isn’t “it’s a wash.” It’s: owning likely costs more in cash and converts some of that cost into equity. Whether that trade is good depends entirely on your time horizon.
The part the cost tables leave out
Tax treatment changes the comparison. Rent is fully deductible against business income. On the ownership side, mortgage interest is deductible but principal isn’t — though you can claim capital cost allowance on the building portion. Net effect varies enormously by business structure and income. This is a conversation with your accountant, not a blog post, but it can swing the comparison by thousands a year in either direction.
Owning has an exit cost. When you eventually sell: commission, mortgage discharge, legal, and potentially recapture of CCA you claimed plus capital gains on appreciation. Leasing ends when the term ends.
Owning has a repair bill. The roof, the overhead doors, the parking surface, the HVAC. As a tenant, most of that is a phone call. As an owner it’s a cheque.
The short version
Renew if the space works and you can negotiate the escalations down. It’s the cheapest answer and the one most owners should take.
Move only if the building itself is the problem.
Buy if you’re confident about ten-plus years in this location, you’re about to spend serious money on the space anyway — cranes, three-phase power, wash bay, fenced and graded yard — or you want the building as part of your retirement.
The clearest signal: if you’re about to spend $150,000 improving a building you don’t own, that’s the conversation to have before you sign the renewal, not after.
Questions we get asked
How much notice do I have to give my landlord?
Whatever your lease says. There’s no statutory default in Alberta. Find the clause now — many require six to twelve months, and missing it can auto-renew you into another full term.
Can my landlord just refuse to renew?
Yes, unless your lease grants you a renewal option. This surprises people every year.
What does additional rent actually cover?
Typically property tax, building insurance and common area maintenance, allocated by your share of the building. Ask for the reconciliation — you’re entitled to see how it was calculated if your lease says so, and you should check that your lease says so.
Is now a bad time to buy?
Asking prices are up 7.3% year over year and inventory is thin, so you’re not buying a dip. But rents are rising too, and a fixed mortgage payment against a rising rent curve is the actual argument for ownership — not the current price.
How much do I need down?
25–35% conventionally. Less through BDC or the Canada Small Business Financing Program if you qualify.
Want help running your own numbers? Send us your current gross rent, your square footage and your renewal date and we’ll tell you where you sit against the market — and whether this is a renewal conversation or a buying one.
General information only. Not financial, legal or tax advice. Confirm with your accountant, lender and lawyer before acting.