To evaluate a commercial plaza in Metro Vancouver, start with the leases, not the building. Check who the tenants are, how long their leases run, what they pay and which costs they cover. Then rebuild the net operating income yourself, test it against the asking price and cap rate, and confirm the building, title, zoning and environmental history in due diligence. A plaza with strong, long leases to daily-needs tenants can be a steady income property for decades. One with several leases ending at once can lose a large share of its income in a single year.
Step 1: Read the rent roll
The rent roll is the seller's summary of every unit: tenant, size, rent, lease start and end dates, and options. Ask for it early and check it against the signed leases, because summaries contain mistakes.
Look for:
- Lease expiries. How many leases end in the next three years? If 40% of the income expires in the same year, you are buying a re-leasing project, not a stable asset.
- Weighted average lease term. The longer the remaining term across the plaza, the more predictable the income. One of the retail centres our team helped a client acquire, anchored by Popeyes and Papa John's in Courtenay, had an average remaining lease term of about ten years.
- Rent compared with the market. Tenants paying well below market rent are an opportunity at renewal. Tenants paying far above market are a risk.
- Vacant units. Count them as vacant. Do not pay today for income someone hopes to collect later.
Step 2: Understand the lease terms
Two plazas with the same rent can be worth very different amounts because of what the leases say. Read every lease, or have your lawyer summarize them, and note:
- Net or gross. In a triple net lease, tenants pay their share of property taxes, insurance and common area maintenance. In a gross lease, the landlord does. Most plaza leases in Metro Vancouver are net, but check each one.
- Rent increases. Fixed steps during the term protect income against inflation.
- Renewal options. Options at a set rent favour the tenant. Options at market rent are more balanced.
- Exclusive use clauses. If the pharmacy has an exclusive, you cannot lease another unit to a competitor.
- Co-tenancy and early termination rights. Some tenants can reduce rent or leave if an anchor closes.
- Assignment and change of control. Can a tenant sell its business and pass the lease to a weaker operator?
Step 3: Judge the tenants
A plaza is only as strong as the businesses paying rent. Ask:
- Who is on the lease? A national company, a franchisee or a small local owner? Is there a personal or corporate guarantee?
- Do they serve daily needs? Grocery, pharmacy, medical, dental, banks and quick-service food tend to be more resilient than discretionary retail.
- How long have they been there, and have they paid on time? Ask for an arrears report.
- How concentrated is the income? If one tenant pays half the rent, its health is the plaza's health.
Step 4: Rebuild the NOI and check the cap rate
Net operating income is the rent you collect minus the operating costs you cannot recover from tenants. Build it from the leases and the expense records, not from the listing brochure.
Here is a simple example with round numbers:
- Base rent from all tenants: $520,000 a year.
- Recoveries of taxes and common costs from tenants: $180,000.
- Total operating costs: $200,000.
- Allowance for vacancy and bad debt at 3% of rent: about $15,600.
- Management, if not recovered: $15,000.
- Net operating income: about $469,400.
At an asking price of $8.5 million, that is a cap rate of about 5.5%. If the brochure showed $510,000 of NOI because it left out vacancy and management, the advertised cap rate would be 6.0%, and you might overpay by hundreds of thousands of dollars. Our guide to cap rates in Surrey and BC explains the calculation.
Then compare the cap rate with recent plaza sales in the same area. Buyers usually accept lower cap rates for newer plazas with strong anchors in growing neighbourhoods, and ask for higher ones where leases are short or the building needs work.
Step 5: Due diligence checklist
- All signed leases, amendments and the rent roll.
- Tenant estoppel certificates confirming rent, term and that there are no disputes.
- Two to three years of operating statements and the common area cost reconciliations.
- Property tax notices and BC Assessment value.
- Title search, including easements, rights of way and covenants.
- Zoning confirmation and permitted uses for each unit.
- Building condition report covering roof, paving, mechanical and electrical systems.
- Phase I environmental site assessment, especially if a gas station or dry cleaner was ever on or near the site.
- Service contracts, warranties and insurance history.
- Your lender's appraisal and financing conditions.
Have your lawyer and accountant review the results. Our commercial property evaluation guide covers due diligence for other property types too.
How we help plaza buyers
Commercial plazas are a core part of our business. The Oberoi Group has helped clients acquire retail centres and income properties across British Columbia, and our team ranked among the Top 3 commercial teams across Canada at RE/MAX in 2025, based on commission. You can see some of those deals, with their prices and cap rates, on our success stories page.
Browse commercial plazas for sale, read about the Vancouver commercial real estate market and our guide to real estate investing in BC, or send us a plaza you are considering. We will review the rent roll, leases and numbers with you before you make an offer.
Frequently asked questions
What should I look for when buying a retail plaza?
Start with the rent roll and signed leases: lease expiries, rents compared with the market, who pays which costs, and the strength of each tenant. Then confirm the income and the building in due diligence.
How do I calculate a plaza's cap rate?
Divide the net operating income by the price. Build the income from the leases and expense records, and include vacancy and management costs.
What is a triple net lease?
A lease where the tenant pays its share of property taxes, insurance and common area maintenance on top of base rent.
What is a tenant estoppel certificate?
A signed statement from a tenant confirming its rent, lease term and that there are no disputes with the landlord. Buyers usually ask for one from each tenant before closing.
Why do lease expiry dates matter so much?
If many leases end at the same time, a large share of the income could disappear at once, and re-leasing takes time and money.
Sources
The deal figures in this article come from our published client results.