Should You Sell or Lease Your Industrial Property in Alberta?

1. Define the owner decision before comparing numbers

Record ownership, signing authority, debt, partners, business transition, cash needs, time horizon, tax posture, management capacity, risk tolerance and whether the current operator needs continued occupancy. Identify non-financial constraints such as confidentiality or a required closing date.

A theoretical long-term return is not useful if the owner cannot fund improvements, carry vacancy, manage a lease or wait for execution.

• Liquidity objective
• Timing
• Debt and covenants
• Landlord capacity
• Capital tolerance
• Business transition

2. Confirm the property is legally and physically marketable

Reconcile title, parcels, access, land use, permits, areas, loading, yard, utilities, building systems, environment, condition and included assets. Resolve which facts are verified and which require professional investigation.

Both buyers and tenants will test operating fit. Prior industrial use, a municipal category, current assessment or owner statement does not prove approval for the next user.

3. Build a supportable sale case

Use relevant completed transactions, current competition, property utility, condition, vacancy or tenancy, environmental evidence and likely buyer requirements to define positioning. Model price as a range and scenario rather than a guaranteed outcome.

Deduct mortgage payout, legal, brokerage, due-diligence work, repairs, closing adjustments, taxes and other owner costs to estimate before-income-tax cash. A gross price is not net liquidity.

4. Build a supportable lease case

Estimate market rent from comparable premises and actual market evidence, then model area, commencement, vacancy, free rent, tenant improvements, commissions, legal, operating costs, non-recoverables, management, bad debt and capital. Use the proposed lease structure, not a headline rent multiplied by area.

A triple-net label does not eliminate owner costs. Roof, structure, capital, environmental obligations, insurance gaps, administration and downtime remain contract- and property-specific.

5. Price the time and capital to reach occupancy

Create a property-readiness and lease-up schedule covering clean-out, repairs, code and permit work, plans, media, outreach, tours, proposals, legal documents, tenant improvements, inspections and rent commencement. Assign cost ranges and dependencies.

Vacancy duration is uncertain. Keep base, faster and slower cases and show the cash required before rent begins rather than hiding it inside a stabilized yield.

6. Compare retained risk after each transaction

A sale can leave representations, environmental or contractual obligations, post-closing access and tax consequences. A lease retains asset value exposure, tenant covenant, default, rollover, capital, environmental, casualty and re-leasing risk.

Do not treat a signed lease as equivalent to collected income or a sale agreement as equivalent to closing. Compare deposits, conditions, guarantees, lender consent and execution capability.

7. Consider sale-leaseback as a separate structure

Where the operating business needs continued use but the owner wants liquidity, a sale-leaseback may be considered. Model sale value and lease economics together, including term, rent, security, options, capital, assignment and the operating company's covenant.

Sale-leaseback pricing is not free financing. The buyer underwrites the tenant and residual real estate, while the seller becomes contractually responsible for rent and other lease obligations.

8. Keep tax, accounting and financing with qualified advisors

CRA states that commercial real-property sales and rentals are generally taxable unless a specific exemption applies. Income tax, GST, capital cost allowance, recapture, corporate structure and debt repayment depend on the actual parties and transaction.

Use tax and accounting advice for after-tax comparisons and lender advice for consent, payout, refinancing and covenant effects. Commercially does not calculate or promise an after-tax result.

9. Test a dual-track process deliberately

In some cases an owner may expose the property for sale and lease, but the audiences, disclosures, pricing and control rules should be designed rather than improvised. Decide how competing inquiries, offers and confidential information will be handled.

Dual-track marketing can broaden options but can also create uncertainty, duplicate negotiations or weaken credibility if the owner cannot state which outcomes are acceptable.

10. Use written decision gates

Set evidence and thresholds for launching, accepting a sale, accepting a lease, funding improvements, changing price or rent, pausing one path and moving to the next. Update the model when market, property or owner facts change.

Commercially can coordinate an Alberta industrial sale, landlord or dual-track brokerage mandate. It does not provide appraisal, legal, tax, accounting, engineering, environmental, insurance or financing conclusions.