KlinDeck Planning Tools

Commercial Buy vs. Lease Calculator

Compare the true cost of buying your clinic space versus leasing it — including mortgage payments, ownership costs, build-out financing, and the hidden cost of tenant improvement allowances embedded in lease rates. Separate Canadian and US models.

Planning reference only. This tool models estimated costs based on your inputs and published rate references. It does not account for property appreciation, capital gains tax, depreciation, or opportunity cost of capital beyond what you enter. Results are planning estimates — not a financial recommendation. Commercial mortgage terms, qualifying criteria, and available rates vary significantly by lender, market, and borrower profile. The rate ranges shown are published reference points only — your actual rate will depend on your credit profile, down payment, property type, and lender assessment. Speak with a qualified commercial mortgage broker and your accountant before making any property purchase decision.
01 — Market & Context
How many years to compare total cost — use your expected lease term or ownership horizon
Helps contextualise the output — does not change the math
02 — Buy Scenario
Total property value
Commercial typically requires 25–35% minimum
Published CA commercial rates: 6.0–7.5%
Commercial typically 20–25 years
Rate assumption drives the output significantly. The published rate ranges above are reference points only. Your actual commercial mortgage rate will depend on your credit profile, down payment percentage, property type, lender, and current market conditions — and may differ materially from the ranges shown. A qualified commercial mortgage broker can provide a realistic rate estimate for your specific situation before you model this comparison.
Ownership costs beyond the mortgage payment
Enter 0 if freehold or standalone building
+
Maintenance reserve
As an owner you're responsible for all repairs — HVAC, roof, structural. Recommended to budget for this.
Optional
Why this matters: In a lease, the landlord handles structural repairs and major capital replacements. As an owner you bear all of these costs — HVAC systems ($15K–40K to replace), roof ($20K–80K), parking, plumbing. Published commercial real estate guidance suggests budgeting 1–1.5% of property value annually as a maintenance reserve. Omitting this understates the true cost of ownership.
Of purchase price — 1.0–1.5% published guidance
0.5% 1.0% / year 2.0%
Auto-calculated from purchase price × rate ÷ 12
+
Build-out financing (buy scenario)
If the purchased space requires fit-out, add the monthly financing cost here.
Optional
Note: A commercial mortgage covers the building. If the space requires leasehold improvements, those are typically financed separately through a term loan, CSBFP, or SBA program — not included in the mortgage. Enter the net build-out cost after any allowances from the seller.
03 — Lease Scenario
Net rent before TMI / operating cost recovery
Tenant's share of property taxes, maintenance, insurance passed through by landlord
Typical lease escalation clauses: 2–3% per year
0% 2.5% / yr 5%
The committed term — used for TI amortization if applicable
+
Tenant improvement allowance
Did your landlord offer a contribution toward your build-out? This is more common than most operators realise — and it has a hidden cost built into your rent.
Important
What is a Tenant Improvement Allowance?

Your landlord's contribution to your build-out — and what it's actually costing you

A tenant improvement (TI) allowance is money your landlord contributes toward fitting out the space — plumbing, electrical, cabinetry, walls. Healthcare tenants are desirable because of long lease commitments and reliable rent, so landlords in competitive markets often offer meaningful TI allowances to attract and retain them.

What most operators don't realise: the TI allowance isn't free. Your landlord recovers their contribution through your lease rate over the term, at an implied interest rate that published commercial leasing data suggests is typically 6–10%. Part of your monthly rent is effectively a financing payment on your build-out — not pure occupancy cost.

This matters because it means a lease with a TI allowance and a higher base rate is not the same as a lease without a TI allowance and a lower base rate — even if the total monthly cost looks the same. And when comparing a lease with TI against buying, the monthly numbers are doing different things. This calculator separates the embedded financing from the true occupancy cost so the comparison is genuinely apples to apples.

Example: A landlord offers a $60,000 TI allowance on a 5-year lease at an implied recovery rate of 8%. The embedded monthly cost is approximately $1,216/month — meaning roughly $1,216 of your monthly rent is TI recovery, not occupancy cost. Over 5 years the landlord recovers their $60K plus approximately $12,960 in implied interest.
Total landlord contribution toward your fit-out
Published data suggests 6–10% — use 8% if unknown
+
Additional build-out financing (lease scenario)
If your build-out exceeds the TI allowance, the remaining cost is typically financed separately — add the monthly payment here.
Optional
Note: Enter the net build-out cost after subtracting any TI allowance. This is typically financed through a CSBFP loan (Canada), SBA 7(a) (US), or equipment/leasehold improvement financing. The monthly payment adds to your true occupancy cost in the lease scenario.
Full Analysis — Unlock Free

See what your numbers are actually telling you

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  • Year-by-year cumulative cost chart
  • Full comparison table with true occupancy cost separated from financing costs
  • TI-adjusted analysis — what your lease is really costing you
  • Maintenance reserve sensitivity
  • Risk observations and planning notes

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Year-by-Year Cumulative Cost
Buy — all-in cumulative
Lease — all-in cumulative
Full Cost Breakdown
Cost Item Buy Scenario Lease Scenario
Planning reference — not a recommendation. This comparison models cash outflows based on your inputs. It does not account for equity built through mortgage paydown, potential property appreciation, capital gains tax on disposition, depreciation benefits, opportunity cost of the down payment deployed elsewhere, or transaction costs on acquisition or disposition. The mortgage rate you enter drives the buy-side output significantly — a 1% difference in rate can materially change the break-even year and total cost comparison. Your actual commercial mortgage rate, qualifying conditions, and available terms must be confirmed with a qualified commercial mortgage broker before any property decision is made. This tool is a structured starting point for an informed conversation with a commercial mortgage broker, commercial real estate advisor, and your accountant — not a substitute for those conversations.
How we source this data →