When owning beats renting
Owning a whole building makes the most sense when:
- You'll stay a long time and your space needs are predictable
- You need things landlords rarely provide — heavy power, cranes, trench drains, a secured yard, extra loading
- You're investing heavily in fit-out and want to keep its value
- You want control over expansion, timing and who your neighbours are
- You have the capital without starving the business
What you get and what you give up
You get the land, the yard and every decision. There's no landlord approval for alterations, no renewal to negotiate and no restoration bill at the end of a term. You give up flexibility: moving means selling or leasing the building out. Every roof leak, paving repair and failed heater is yours to fund. Rent vs buy covers the decision in depth, and the rent vs buy tool runs your own numbers.
The capital it ties up
Budget for more than the down payment:
- The equity your lender requires
- Closing costs: legal fees, Land Titles registration fees on the transfer and the mortgage, the appraisal and due diligence reports
- GST on the purchase, depending on how you're registered
- Immediate repairs and fit-out
- A reserve for capital items such as the roof, paving, doors and mechanical systems
- Ongoing property tax, insurance, utilities and maintenance
Due diligence: what to check
| Area | What to get | Why it matters |
|---|---|---|
| Title | Current title and every registered instrument | Caveats, easements, utility rights-of-way and restrictive covenants can limit use or expansion |
| Survey | A Real Property Report or survey | Shows the buildings against the property lines, and any encroachments |
| Environment | Phase I Environmental Site Assessment, and a Phase II if recommended | Standard on industrial purchases; lenders commonly require it |
| Building condition | A building condition assessment | Roof, structure, slab, docks, doors, heating and electrical are costs you inherit |
| Land use | The district and your use, confirmed by the municipality | Your use must be allowed; industrial districts generally don't permit dwelling units |
| Permits and orders | Permit history and any outstanding orders | Unpermitted work becomes your problem |
| Fire protection | Sprinkler design and fire alarm records | High or dense storage can require permits and fire-protection review |
| Existing leases | Copies of any tenancies | Tenants and their rights transfer with the building |
The offer and closing
An offer to purchase sets the price, the deposit, the closing date and the conditions — commonly financing, environmental, building condition, title and land use review. Negotiate a conditions period long enough for the Phase I, the building assessment and the lender's appraisal; rushing it is how problems get missed. Ask the seller early for surveys, reports, permits, tax bills, service contracts and warranties.
On closing, your lawyer registers the transfer and the mortgage at Land Titles and prepares a statement of adjustments for property tax and other prorated items. See how to buy a warehouse for the full sequence.
Financing notes
Owner-user buildings are financed with a commercial mortgage. Lenders assess the property and your business, typically order an appraisal, rely on the environmental and building reports, and commonly require more equity than a home purchase. Many owner-users hold the building in a separate company that leases it to the operating business; the right structure is a legal and tax question. See financing a warehouse purchase.
Leasing out surplus space
Buying more building than you need and leasing out the rest can offset carrying costs and hold room for growth. It also makes you a landlord. A separate tenant bay may need its own entrance, washroom, meters and fire separation, usually with a building permit, plus a proper lease and tenant screening. Your lender may treat rental income differently from owner-occupied space. The rent-out planner sizes the rentable portion, and leasing out a unit covers the landlord side.
Selling later, and where to start
Ownership also gives you exits a tenant doesn't have: sell, lease the whole building, or do a sale-leaseback, which turns the real estate into cash and a long-term lease but gives up future appreciation and control of the property.
To start, write down your must-haves — size, clear height, doors, power, yard and location — and a ceiling on the capital you'll commit. Talk to a lender before you shop, and line up a lawyer, an accountant, an environmental consultant and a building assessor. Commercially × Real Broker provides brokerage services in Alberta; start at buy.
Due diligence checklist for an owner-user purchase
- A current title search and copies of every registered instrument
- A Real Property Report or survey showing the buildings against the boundaries
- A Phase I Environmental Site Assessment, and a Phase II if it recommends one
- A building condition assessment covering roof, structure, slab, docks, doors and mechanical
- Written confirmation of the land use district and whether your use is allowed
- Permit history and any outstanding municipal or fire orders
- Electrical service capacity and sprinkler design against your plans
- The property tax assessment and recent tax bills
- Any leases, service contracts and warranties that transfer with the building
- GST treatment and ownership structure, confirmed with your accountant and lawyer
Questions people ask
Is it better to buy or lease a warehouse?
It depends on your horizon and your capital. Buying suits a business that will stay many years, needs specialized features and can commit capital without straining operations. Leasing keeps cash in the business and makes growing or moving easier. Compare the total cost of each over the same period, including the capital that buying ties up, and get advice from your accountant.
What due diligence is needed to buy an industrial property?
At minimum: a title search with every registered instrument, a survey or Real Property Report, a Phase I Environmental Site Assessment, a building condition assessment, and confirmation from the municipality that your use fits the land use district. Add permit history, fire-protection records, property tax information and copies of any existing leases. Your lawyer and lender may ask for more.
Is there a land transfer tax in Alberta?
No. Alberta has no land transfer tax. Instead, Alberta Land Titles charges registration fees when a transfer of land and a mortgage are registered, and those fees are based on value. Commercial purchases are also generally subject to GST, which a GST-registered purchaser generally self-assesses. Confirm your closing costs with your lawyer and accountant.
Do I need a Phase I environmental assessment to buy a warehouse?
It's standard due diligence on an industrial purchase, and lenders commonly require one. A Phase I reviews the site's history, records and visible conditions for signs of contamination. If it finds concerns, it may recommend a Phase II with sampling. Buying without one means accepting environmental risk you can't see, which can be costly to fix and hard to finance.
Can I lease out part of the warehouse I buy?
Yes, if the building can be divided and the tenant's use fits the land use district. A separate tenant space may need its own entrance, washroom, meters and fire separation, usually with a building permit. You'll need a proper commercial lease, insurance and tenant screening, and your lender should know your plans because rental income can affect financing.
Reviewed 2026-09-30 · General planning guidance · Sources and boundaries