Buying
Buying the building you lease
Sometimes the best building for your business is the one you’re already in. Approached well, it can be a good deal for you and for the owner. Start with your lease and any right of first refusal, get a realistic value, then approach the owner with a clear, fair offer and proper conditions.
Buyer representation
What buying your landlord’s building involves
A plain explainer if you’re new to this.
- What it is
Buying the building you lease
You rent space and the owner may sell. Buying it means your business becomes the owner, and you become your own landlord.
- How it works
Your lease and your rights
Check whether your lease gives you a right of first refusal or first offer. If it does, it sets out how and when you can match or make an offer.
- Money
Down payment and other tenants
Lenders usually want 25 to 50 percent down. If there are other tenants, their rent helps carry the mortgage, and you take on their leases.
- What I check
Price, condition and the leases
I look at the price against what the building would sell for, its condition, the other leases, and what you’d pay owning against what you pay renting.
Start with your lease
Check for a right of first refusal or a right of first offer. Either one can give you a chance to buy before the landlord sells to someone else. They have strict notice periods and conditions, so have your lawyer read the wording.
Even without one, you know the building better than any other buyer, and you’re already paying the rent.
Why your landlord might sell
Owners sell when something changes: a problem with the building or the debt, a change in their life or estate plans, a better use for the money, or an offer they find hard to refuse. Knowing which one applies tells me how to approach them. The why owners sell section explains it.
How I approach it
- Research the property: ownership, how long they’ve held it, what they paid, the mortgage on title and what similar buildings sell for.
- Work out what it’s worth to you, and to them, including the rent they lose if you move out.
- Make a quiet first approach, usually through me so your day-to-day relationship with the landlord stays easy.
- If there’s interest, write an offer with conditions for financing, inspection and a review of every lease in the building.
If the answer is no
That’s fine, and it often comes up again later. I can keep track of the property and your lease dates, so if the owner’s situation changes we hear about it early. Your renewal is also a good time to ask again.
Questions people ask
What is a right of first refusal in a commercial lease?
It gives the tenant the right to match an offer the landlord accepts from someone else, within a set time. The details vary, so have your lawyer read the clause.
Will asking hurt my relationship with my landlord?
Usually not, if it’s done respectfully and through an agent. Many owners are glad to hear from a tenant who already knows the building.
Can I buy just my unit?
Only if the building is stratified, or the owner is willing to stratify it, which takes time and approvals.
What should I gather, ask and watch for?
Documents to gather
- Your lease, including any right of first refusal or offer
- What you know about the building’s condition and other tenants
- Proof of funds and financing
- A rough value range
Questions to ask
- Does my lease give me a right of first refusal?
- What are the other tenants’ leases?
- Why might the owner sell, and when?
- What happens to my lease if I buy through a company?
Common mistakes
- Approaching the owner without knowing what the building is worth
- Paying too much because you’re emotionally invested
- Skipping due diligence because you know the building
- Forgetting other tenants’ rights
Typical timeline
- Month 1Value range and financing
- Months 1 to 3Approach and talk
- Offer to conditions30 to 60 days typical
- Completion30 to 90 days
Typical ranges. Your lease, lender and the City set the real dates.
Go deeper
If you’re looking for more details
How to open the conversation
Start with a short, friendly letter or call: you like the building, you plan to stay, and if they ever think about selling, you’d like to talk first. Some owners are glad to hear it. Some say no now and call back later.
Your advantages as the tenant
- You know the building’s condition
- No lender worry about vacancy in your own space
- The owner saves on marketing and keeps a reliable tenant
For buyers
Why do owners sell?
Knowing why a seller is selling tells you who is motivated, and what a deal needs to look like for them to say yes. It almost always comes down to one of these four.
- Problem
Something is forcing a decision.
Debt, management, cash flow, rising expenses or the condition of the property.
- Change
Something in the owner’s life has changed.
An estate, a move, a new portfolio strategy or a change in life circumstances.
- Opportunity
Selling opens a door somewhere else.
Another investment, a need for capital, or repositioning what they own.
- Price
The offer is too good to pass up.
An exceptional price, the chance to turn it into cash, or simply “I can’t pass this up.”
The takeaway: owners sell when their circumstances, priorities or opportunities change.
Run the numbers
- Lease vs buyOwning usually wins over longer holds if the value grows and you have the down payment.
- Cap rate, NOI and valueCap rate is net operating income divided by price.
- BC Property Transfer Tax calculatorProperty transfer tax in BC is 1% on the first $200,000, 2% up to $2 million and 3% above that, plus another 2% on residential value over $3 million.
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Next step
Thinking about buying your building?
Send me the address and your lease. I can tell you what it says and how I’d approach the owner.