Build a retail occupancy budget before choosing a site

Create a complete premises schedule

Start with the documented area and the quote’s annual or monthly basis. BOMA’s retail measurement framework focuses on determining rental areas; ask for the actual basis used in the offer. Separate base rent, additional charges, utilities and any centre-specific charges supplied with the proposal.

Treat an estimated charge as an estimate. Record its budget year, included items and the document needed to resolve uncertainty. An attractive headline rate does not establish the cost of signage, fit-out, equipment, servicing or access to the premises.

Separate rent from sales-linked payments

Statistics Canada’s commercial-rent reporting guide identifies percentage rent as a sales-related payment distinct from net effective rent. If a retail proposal contains such a payment, record the exact formula, threshold, reporting period and defined sales basis for review.

Do not apply a generic percentage to an offer that does not specify it. Keep the sales model independent of the rent model until the supplied terms connect them. This makes it easier to see whether a scenario changes only revenue or also changes a premises payment.

Hypothetical example: a monthly budget

A hypothetical 1,500-square-foot store has annual base rent of $28 and additional rent of $12 per square foot. The rent subtotal is $60,000 a year, or $5,000 a month. Add a hypothetical $600 monthly utilities allowance and $200 premises insurance allowance: modelled recurring occupancy is $5,800.

At hypothetical monthly sales of $50,000, that amount is 11.6% of sales. At $35,000, it is about 16.6%. These are scenario ratios, not recommended affordability limits or market benchmarks. The example excludes tax, percentage rent, payroll, inventory, improvements and other business expenses.

Model the opening separately

List the deposit, construction, fixtures, equipment, professional work and moving costs as dated cash needs. Record incentives separately and distinguish promised reimbursement from cash available at the start. A business can have a manageable recurring bill and still face a difficult opening cash gap.

Test an opening delay using the actual payment commencement assumptions. Show which costs continue during the delay and which move with opening day. Do not invent a universal contingency percentage; choose and label a reserve based on the project’s unresolved costs.

Evaluate location with evidence

Ask for evidence relevant to the business: visibility, access, customer arrival, neighbouring uses and restrictions that affect the proposed operation. Distinguish a verified fact from a sales claim or a modeled demand hypothesis. A foot-traffic assertion without a measurement period and method is incomplete.

Combine the cost schedule with conservative, central and stronger sales scenarios. Keep the assumptions editable. The result should explain what sales and opening conditions the decision depends on, without presenting a forecast as a guaranteed outcome.

Sources and scope.

Sources checked 12 October 2026. Numerical examples are hypothetical; figures from the official index carry their published source period.

Questions worth asking.

Is there one safe occupancy-cost percentage for every retailer?

No universal threshold is supplied here. Margins, staffing, inventory and business models differ; use your own complete operating assumptions.

Does additional rent include every operating expense?

Only include what the supplied documents identify. Track uncertain or separately billed items as distinct lines.

Can market rent prove a retail site will be successful?

Rent evidence helps assess premises pricing. It does not establish customer demand, revenue or profitability.

Build a retail occupancy budget before choosing a site.