GTA Sale-Leaseback Trends 2026

What is a sublease in industrial real estate?

A sublease in industrial real estate is an arrangement where the original tenant (the sublandlord) rents all or part of their leased space to a new occupant (the subtenant) for a period within the remaining term of the original lease. The original tenant remains liable to the landlord under the head lease; the subtenant pays rent to the original tenant, not directly to the landlord. Subleases are common in the GTA industrial market when tenants need to downsize, relocate, or shed excess space before their lease expires — and typically offer subtenants a price discount of 10–25% below comparable direct lease rates.

What does triple net (NNN) mean in a commercial lease?

A triple net (NNN) lease means the tenant pays base rent plus three additional cost layers: property taxes, building insurance, and maintenance/operating costs. In GTA industrial real estate, virtually all leases are structured as triple net — the landlord collects a fixed net rent and passes all operating expenses through to the tenant, either as direct charges or as a proportionate share of the building's total operating costs. Understanding what is and is not included in the operating cost pool is one of the most important aspects of industrial lease negotiation.

What is a tenant improvement allowance in an industrial lease?

A tenant improvement allowance (TI) is a cash contribution from the landlord to help the tenant build out or modify a leased space. In GTA industrial leases, TI allowances typically range from $5 to $25 per square foot depending on deal size, term length, and building vintage. The allowance is applied against the cost of approved work — office build-out, dock levellers, electrical upgrades, HVAC modifications — and is usually structured as a landlord reimbursement after construction completion, not a cash advance.