Is sublease space cheap in Toronto?

Sublease typically trades 15–30% below direct asks for equivalent specification. The total economics depend on remaining term, TI condition, and the assignment/sublet provisions in the prime lease.

Can I convert a sublease to a direct lease in Toronto?

Sometimes. On longer-horizon takes, ask the landlord to write a fresh direct lease at sublease commencement — they get a creditworthy long-term tenant; you get rent-free and TI.

Sublease availability in Toronto is concentrated in older Class B and lower-tier Class A stock; trophy assets like Financial Core clear quickly even when the broader market shows 17.6% vacancy.

Direct vacancy is 17.6%; sublease overhang is concentrated outside the trophy tier.
Sublease space typically prices 15–30% below direct asks for equivalent specification.
Term-take risk and limited TI are the two biggest sublease tradeoffs.
Trophy submarket (Financial Core) has the thinnest sublease overhang.

Toronto Class A sublease market

sublease">Sublease availability in Toronto is concentrated in older Class B and lower-tier Class A stock; trophy assets like Financial Core clear quickly even when the broader market shows 17.6% vacancy.

TL;DR

Direct vacancy is 17.6%; sublease overhang is concentrated outside the trophy tier.
Sublease space typically prices 15–30% below direct asks for equivalent specification.
Term-take risk and limited TI are the two biggest sublease tradeoffs.
Trophy submarket (Financial Core) has the thinnest sublease overhang.

Where the sublease overhang sits

In Toronto, sublease availability concentrates in the older Class A and Class B segments — not in trophy product. Vacancy across the broad Class A index is 17.6%; the trophy tier in Financial Core is structurally tighter.

What you give up

Subleases trade at a discount, but you inherit the prime tenant's term, get limited or no TI, and live with whatever fit-out">fit-out exists. For occupiers under a 24-month horizon, that tradeoff usually wins. For multi-year HQs, direct deals with rent-free and TI almost always produce better effective economics.

Negotiating points

Look for direct deals with the landlord at sublease commencement (a "bypass" structure) — landlords will sometimes write a fresh long-term lease to take a problem space off the prime tenant's books. Net leases — tenant pays a base rent plus a proportional share of operating expenses, realty taxes, and utilities (TMI). Rent-free of 12-24 months on a 10-year term is current market. Bank guarantees common for non-investment-grade covenants.

Key facts

city	Toronto
country	Canada
region	Americas
classARentLocal	78 CAD/sqft/yr
classARentUsd	$57/sqft/yr
vacancy	17.6%
typicalLeaseYears	10
typicalRentFreeMonths	18
submarkets	6
primeYieldPct	5.5%

Frequently asked questions

Is sublease space cheap in Toronto?: Sublease typically trades 15–30% below direct asks for equivalent specification. The total economics depend on remaining term, TI condition, and the assignment/sublet provisions in the prime lease.
Can I convert a sublease to a direct lease in Toronto?: Sometimes. On longer-horizon takes, ask the landlord to write a fresh direct lease at sublease commencement — they get a creditworthy long-term tenant; you get rent-free and TI.

Editorial provenance

Reviewed by Miriam Hollander — Lead market analyst. Last updated 2026-04-15. See our methodology and editorial standards.

Primary sources for this page

CBRE Marketview reports — CBRE
JLL Office Insight — JLL
Cushman & Wakefield Marketbeat — Cushman & Wakefield
Savills World Research — Savills
Colliers Global Office Outlook — Colliers

Full sources index · Submit a correction