Compare a direct lease vs sublease side-by-side over the same term.

• Compare a direct lease vs sublease side-by-side over the same term.
• Quantifies total savings, effective $/sf, monthly cash difference, and breakeven.
• Includes sublease-specific risk callouts.

TL;DR

• Compare a direct lease vs sublease">sublease side-by-side over the same term.
• Quantifies total savings, effective $/sf, monthly cash difference, and breakeven.
• Includes sublease-specific risk callouts.

Methodology

Each scenario computes total cash rent over the term, deducts the value of free-rent months and any fit-out-capex">TI allowance, and adds broker fees. Result is net effective rent in dollars and as $/sf/year. Total savings = direct net − sublease net; monthly delta = savings ÷ term months. Breakeven is the month at which cumulative direct cost would equal cumulative sublease cost. Model assumes flat rent and ignores opex pass-through differences.

How to use it

1. Set market and sublease rents — Use $/sf/year for both. Use the asking sublease rate, not list market.
2. Enter the term — Match the sublease term — usually whatever's left on the prime tenant's lease.
3. Add concessions — Free-rent months and any TI allowance for each scenario.
4. Read the breakdown — See total cost, monthly delta, and effective $/sf for each path.

Frequently asked questions

Why is sublease usually cheaper?

Sublessors typically discount 20–40% versus direct market rent to offload space quickly. The trade-off: shorter term, less TI, and the prime tenant's covenant risk.

What are the risks of subleasing?

Prime tenant default risk (you lose your lease), no direct relationship with the landlord, often 'as-is' condition, limited renewal rights, and sub-lessor consent required for any alterations.

Should I include opex?

If both deals are gross or both NNN, you can leave them out. If one is gross and the other is NNN, gross-up the NNN rent by typical opex (~$15–$25/sf in Class A) for a like-for-like comparison.

What is breakeven?

The month where cumulative direct-lease spend would have caught up to cumulative sublease spend if rents were equal. It's a sanity check on how durable the sublease discount is.

Related topics

• Sublease Strategy — How to use the sublease market — both as a tenant taking sublease space and as an over-supplied incumbent offloading.