Choosing a commercial manager comes down to whether they can run the lease as a financial instrument, not just keep the building clean. The questions that actually separate firms are about lease administration, additional rent reconciliation and capital planning, and most owners never ask them.
This guide explains what integrated commercial management means, what to look for, how fees are structured in Ontario, and the fourteen questions worth taking into every meeting.
Written by A.J. Keilty, who worked as a commercial real estate broker at J.J. Barnicke, later DTZ and now Cushman & Wakefield, before founding KEILTY in 2003. Last reviewed 2026-09-13.
Ask for two documents before you ask anything else: a redacted monthly owner report and a redacted annual additional rent reconciliation. Those two files tell you whether a firm operates buildings or merely administers them. Everything else in this guide is elaboration on that test.
Integrated commercial property management means one accountable party running leasing, lease administration, building operations, financial reporting, capital planning and compliance against a single plan for the asset. The opposite, which is far more common than the industry admits, is those six functions split between a leasing broker, a bookkeeper, a facilities contractor and the owner, none of whom sees the whole picture.
The practical test is simple. When a lease is signed, does the operating budget, the recovery model and the capital plan update automatically, or does somebody re-key it into a spreadsheet three weeks later? Integration is not a philosophy. It is whether the numbers move together.
This matters more in commercial than in residential because the pieces are mathematically linked. Base rent, additional rent recoveries, capital works and lease terms all reference each other. A landlord who agrees a cap on a tenant's operating cost recoveries has changed the return on every future capital project in that building. A landlord who lets a renewal option window pass unnoticed has handed a tenant a below-market rate for another five years. A landlord whose reconciliation is late or sloppy leaves recoverable money on the table permanently, because you generally cannot go back for it.
Frankly, most buildings under one million square feet are managed in silos, and the losses are invisible because nobody is measuring the counterfactual. You do not get an invoice for the renewal you failed to negotiate.
Six things, in descending order of how much money they move.
Expiries, renewal and extension option windows, rent escalation dates, fixturing periods, restoration obligations, assignment consents, co-tenancy triggers and termination rights. Each one is a date on which value is either captured or lost. Ask how they are tracked, who reviews them, and how far ahead the owner is told. A calendar reminder in one person's Outlook is not a system.
Under a net lease, most of the cost of running the building is recovered from tenants. That recovery only works if the budget is right, the monthly estimates are billed correctly, and the year-end reconciliation is done properly and on time, line by line, against the actual lease language for each tenant. Different tenants in the same building often have different exclusions, caps and gross-up provisions. A manager who reconciles every tenant off one template is getting some of them wrong.
Office, retail and industrial fail in different ways. Office lives or dies on common area presentation, HVAC and parking. Retail turns on tenant mix, co-tenancy and percentage rent. Industrial turns on clear height, loading, power and floor loading, and on tenants whose operations can materially affect the building. Ask what they manage today that resembles what you own.
Commercial management is not remotable in the way residential partly is. Someone has to walk the roof, look at the parking lot in February, and be known to your tenants by name. Ask who that person is, how often they attend, and how many properties they personally carry.
Roofs, parking, HVAC and building envelope are the four line items that decide whether you have a good decade. A manager who can only tell you about this year's budget is a bookkeeper. Ask for a multi-year capital plan with remaining useful life by system and a funding view.
Ask directly whether any mark-up is applied to maintenance invoices, whether the firm or its principals own any of the trades dispatched to your building, how leasing commissions are set and disclosed, and whether project or construction management on capital works is charged separately and at what rate. None of these are improper if disclosed. All of them are a problem if discovered later.
The governing law is different, and that changes everything downstream. Commercial tenancies in Ontario run on the negotiated lease and the Commercial Tenancies Act, not the Residential Tenancies Act. There is no Landlord and Tenant Board equivalent for most commercial disputes, and remedies such as distraint and termination follow the lease and the common law. The document controls, which means the quality of lease drafting and lease administration is the whole game.
The time horizon is different. A residential tenancy is measured in months and turns over predictably. A commercial lease runs for years, and a single renewal negotiated well or badly can outweigh a decade of operating efficiency.
The money flows differently. In residential, the owner pays the operating costs out of rent. In commercial net leases, most operating costs are recovered from tenants as additional rent, so the manager's job includes budgeting those costs, billing estimates, and reconciling to actuals annually. Getting that wrong is not a rounding error, it is unrecovered cash.
And the tenant relationship is different. A commercial tenant is a business whose own operations depend on your building. Retention is worth far more than in residential, because the cost of a vacancy includes not just lost rent but leasing commissions, tenant inducements, fixturing periods and often a capital contribution to fit out the space.
Four structures are common in Ontario: a percentage of gross rent collected, a percentage of additional rent, a per-square-foot rate, or a fixed monthly fee. Leasing commissions and construction or project management fees on capital works are usually charged separately in all four.
KEILTY charges 15% of additional rent. It is worth understanding what that structure actually means for an owner, because it is not the same as a percentage of your rent. Additional rent is the tenant's proportionate share of the cost of running the building: realty taxes, insurance, common area maintenance, utilities where not separately metered, and the management fee itself. Under a net lease those costs are recovered from tenants. So the management fee is carried within the recovery structure rather than taken out of your base rent, which is why the lease language defining recoverable costs deserves at least as much of your attention as the fee percentage.
Two cautions apply to every structure. A percentage of gross rent collected rewards collection but is indifferent to operating cost discipline. A fixed fee is predictable but can leave a manager under-resourced on a building that turns out to need real work. Ask any manager to explain what their structure incentivises and what it does not, and be sceptical of anyone who claims their fee model has no trade-offs.
Our full commercial service scope, by asset class, is at keilty.com/commercial-property-management, with detail for office, retail and industrial property.
Take these into every meeting, including ours.
Integrated commercial property management means one accountable party running leasing, lease administration, building operations, financial reporting, capital planning and compliance against a single plan for the asset, rather than those functions being split across a leasing broker, a bookkeeper, a facilities contractor and the owner. The practical test is whether a leasing decision automatically changes the operating budget, the recovery model and the capital plan without anyone re-keying it. Integration matters in commercial real estate specifically because base rent, additional rent recoveries, capital works and lease terms are mathematically linked, so a decision taken in one silo quietly moves the numbers in another.
Look for six things: demonstrated competence in your asset class rather than commercial property generally, a lease administration system that tracks every critical date and escalation, an annual additional rent reconciliation you can audit line by line, a named local manager who has actually been to the building, a capital plan that runs beyond the current fiscal year, and a fee structure with no undisclosed mark-up on maintenance or related-party trades. The single most revealing request is to ask for a redacted copy of a real monthly owner report and a real CAM reconciliation.
The common structures are a percentage of gross rent collected, a percentage of additional rent, a per-square-foot rate, or a fixed monthly fee, sometimes with leasing commissions and construction or project management fees charged separately. KEILTY charges 15% of additional rent on net leases. That structure means the management fee is recovered through the operating cost recoveries paid by tenants under a net lease rather than taken out of the owner's base rent, which is why the lease language defining recoverable costs matters as much as the fee percentage itself.
Commercial tenancies are governed by the negotiated lease and the Commercial Tenancies Act rather than the Residential Tenancies Act, so the document controls almost everything and there is no Landlord and Tenant Board equivalent for most disputes. Leases run for years rather than months, contain options, escalations and critical dates that create real value or real loss depending on whether anyone is tracking them, and most of the operating cost is recovered from tenants through additional rent, which has to be budgeted, billed and reconciled correctly every year.
Additional rent is the tenant's proportionate share of the cost of running the building, charged on top of base rent under a net lease. It typically covers realty taxes, insurance, common area maintenance, utilities where they are not separately metered, and the management fee. Tenants usually pay a monthly estimate through the year, and the landlord reconciles the estimate against actual costs after year end, issuing a further invoice or a credit. A weak reconciliation is where owners quietly lose recoverable money.
At minimum: a rent roll with occupancy and weighted average lease term, budget to actual on operating costs with variances explained in words, an arrears report by tenant with the action being taken on each, a maintenance and work order summary, the status of any capital projects against approved budget, and a forward look at critical dates in the next twelve months including expiries, renewal option windows and escalation dates. If the report does not let the owner see a problem before the owner hears about it, it is a record rather than a management tool.
There is a genuine argument both ways. A single party doing both removes the handoff between the person who signs a deal and the person who has to operate it, which is where a lot of value is lost. A separate broker brings independent market reach and removes any conflict between the manager's desire to keep a building full and the owner's interest in the right tenant at the right rent. What matters is that the arrangement is explicit, that commissions are disclosed in writing, and that whoever leases the space is accountable for how the deal performs afterwards.
KEILTY charges 15% of additional rent for commercial property management, covering office, retail, industrial and mixed-use assets in Eastern Ontario. The service scope and asset class detail are published at keilty.com/commercial-property-management, with dedicated pages for office, retail and industrial management.
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