New York City is a bustling global business hub with access to international markets, diverse industries, and a large pool of potential clients and investors. Plus, entrepreneurs have direct access to a highly skilled and diverse workforce and networking opportunities with professionals and venture capitalists that can change a business’s trajectory.
Therefore, it’s no surprise that Canadian entrepreneurs want to try their luck in the Big Apple. Still, it’s not as easy as finding a place you like and signing a lease. There are extra hurdles to jump through as a citizen of another country.
In this guide, we’ll walk you through the most important steps to keep in mind when trying to secure a commercial property lease in NYC as a Canadian.
1. Understand the U.S. Commercial Leasing Framework
Unlike residential leases, commercial leases in NYC are largely unregulated. This means that everything is negotiable and landlords have significant flexibility in setting terms. Furthermore, as a foreign entity (your Canadian company), you’ll face extra compliance requirements for business registration and taxation.
This is why you should never go alone in this battle. You’ll need to talk to a few commercial real estate lawyers licensed in New York City, ideally with experience in cross-border transactions. Also, find a commercial broker familiar with your industry sector (retail, office, or industrial) and a CPA who understands U.S.–Canada tax treaties.
These professionals will help you understand the leasing framework and provide guidance on due diligence, contract review, and regulatory alignment.
2. Legal Entity Formation & Registration
To sign a commercial lease, you’ll need a U.S.-recognized entity, which is why most Canadian entrepreneurs form a New York LLC or Delaware C-Corp.
If you choose either of these paths, you’ll need an EIN (Employer Identification Number) from the IRS, proof of registration with the New York Department of State, and a registered agent for service of process.
Extra tip: Don’t sign a lease personally as a foreign individual. Always use the corporate entity to limit liability exposure.
3. Lease Negotiation: Key Terms and Strategies
Now, just because landlords are free to set their terms, it doesn’t mean you have to agree with any outrageous ones. But to distinguish between good and bad terms, you need to understand what goes into an NYC commercial lease.
Here’s what’s included in the final price of an NYC commercial lease.
- Base rent and escalations: Escalations are annual percentage increases tied to the Consumer Price Index.
- Triple Net (NNN): Tenant pays property taxes, insurance, and maintenance.
- Good Guy Guarantee: Common for NYC leases — a personal guarantee that terminates once you vacate and are current on rent.
You are free to negotiate (and you should) on tenant improvement (TI) allowances and ask for a rent abatement period during renovations or initial months. Also, check the contract for caps on operating expense increases (ask to include them if they don’t exist) and carefully review the assignment/sublease clauses.
Extra tip: As a Canadian, you bring a unique approach to real estate that can give you an advantage in negotiations. So lean on your origins.
Wrap Up
Leasing commercial property in NYC as a Canadian is very doable but requires preparation. Legal, tax, and zoning rules differ from those in Canada, so working with a New York real estate attorney and a cross-border accountant is essential. But, with proper guidance and due diligence, you can secure great terms and avoid compliance pitfalls. So don’t give up just because the process is a bit more complex!
