Tenant’s Corner

Q1 2026 | February Edition
Prepared by: Paramount Real Estate Properties Inc.
Market Focus: Greater Toronto Area (GTA)
Asset Coverage: Office

Best Ways for Small Companies to Find Class A Office Space in Downtown Toronto

Finding the right office space in downtown Toronto is tough — especially for smaller entrepreneurial companies trying to grow. The downtown core, home to Canada’s biggest business districts and most iconic addresses, offers prestige and unmatched access to clients, talent, and transit. But for firms under 5,000 square feet, securing a small Class A space often feels like an uphill battle of limited supply, fierce competition, and rising costs.

Before we jump into strategies, let’s set the scene.

Toronto’s Office Market Is Improving — But Still Bifurcated In Demand

Recent market data shows that downtown Class A vacancy has been decreasing, particularly as leasing activity strengthens and sublease space continues to be absorbed. Class A product in the core is now at its lowest vacancy levels in several years, reflecting renewed demand for high-quality office space. 141 Bay Street – CIBC SQUARE's 50-storey second tower – is fully leased and on track to imminently achieve initial occupancy across its low- and mid-rise floors.

CIBC SQUARE is considered one of Canada's premier office complexes due to its connectivity to transit, amenities, proximity to iconic city landmarks; making it a best–in–class workplace experience for employees.

It also serves as a community hub, featuring state-of-the-art spaces and amenities, including a conference centre, fitness facilities, bicycle storage, and diverse food and beverage options. The first tower, 81 Bay Street, opened in 2021 adjacent to The Park at CIBC SQUARE—Toronto's only elevated park built on public infrastructure and the first of its kind in Canada—a one–acre green space that spans the rail corridor and seamlessly connects 81 Bay and 141 Bay. Adjacent to the park, TABLE Fare + Social on the fourth floor of 81 Bay delivers an activated food–hall experience featuring distinctive local cuisine.

Though overall office vacancy across the GTA has remained elevated, the durable strength of best-in-class buildings downtown is a clear signal: tenants see value in premium space and are committing to long-term occupancy.

That said, small spaces remain scarce and competitive. Here’s how to approach your search strategically.

Why Small Businesses Still Target Class A Downtown

Small tenants gravitate toward downtown Class A for reasons that go beyond aesthetics:

• Credibility and Branding: A downtown address communicates professionalism and stability. For client-facing businesses — law firms, consultancies, finance and tech services — this matters.
  

• Amenities & Infrastructure: Class A buildings offer modern HVAC, strong property management, advanced tech infrastructure, and access to cafes, transit, and services.
  

• Transit & Accessibility: With Union Station and multiple subway lines, downtown is easily reachable for teams and clients — a hiring and retention advantage.
  

Top Strategies to Find Small Class A Offices in Downtown Toronto

1. Work with a Tenant-Focused Broker

You absolutely want expert representation. A tenant broker knows where small suites are hiding — including spaces not publicly listed — and can negotiate terms that protect your interests rather than the landlord’s.

A good broker can also:

• Identify sublease and speculative suites
  

• Advise on landlords’ reputations and negotiation leverage
  

• Help with build-outs and tenant improvement packages
  

This guidance is invaluable in a market where Class A demand is outpacing small-space supply.

2. Prioritize Plug-and-Play or Pre-Built Spaces

Many landlords are now offering finished units geared to smaller tenants — fully built out, sometimes furnished, with lighting, cabling, and basic finishes ready to go.

These suites reduce your time to occupancy, eliminate costly construction delays, and help you avoid large upfront CapEx.

3. Explore Sublease Opportunities

Subleases remain a strong strategy for small tenants. Larger companies frequently downsize or relocate, leaving high-quality, move-in-ready space available at sub-market rents.

Benefits of subleasing include:

• Potentially lower rent compared to direct leases
  

• Shorter lease terms or flexibility
  

• Built-in improvements from the previous tenant
  

Watch for landlord consent clauses and end-term obligations — and always get legal review before signing.

4. Tap Into Shared or Spec Suites in Class A Buildings

Beyond third-party co-working providers, institutional landlords are launching their own shared spaces or spec suites to attract small tenants without sacrificing building prestige.

These arrangements often include access to premium building amenities — a key draw for teams that want the prestige and convenience of Class A without the traditional lease footprint.

5. Define Your Non-Negotiables Upfront

Be crystal clear about what matters most before you start touring spaces. Common priorities include:

• Minimum size and preferred layout
  

• Transit access
  

• Budget range including TMI and taxes
  

• Amenity requirements
  

This focus reduces wasted tours and strengthens your negotiating position when the right opportunity comes.

6. Put Market Data to Work

Use market information - like the data we provide in our free newsletters - to understand rent trends, vacancy rates, and availability in specific corridors — Yonge-Bay generally commands premium pricing, while fringe submarkets can offer better value.

Understanding where demand is heating up (and where it isn’t) helps you target your search effectively.

7. Negotiate Smart Lease Terms

Even small tenants can secure concessions. Consider asking for:

• A period of free rent
  

• Tenant improvement allowances
  

• Expansion options
  

• Early-termination flexibility
  

A good broker and real estate attorney will structure these elements to support your long-term strategy.

8. Don’t Dismiss Co-Working & Flex Spaces in Class A

Co-working providers like WeWork, Regus, and Venture X operate premium locations downtown, offering private offices and flexible membership models.

For teams still testing the downtown market or seeking short-term flexibility, this hybrid option blends prestige with adaptability.

Final Thoughts

Finding a small Class A office in downtown Toronto is challenging — but it’s far from impossible. With thoughtful strategy, market insight, and expert support, you can secure space that elevates your brand, supports recruitment, and positions your firm for growth.

Here’s what we recommend:

• Partner with a tenant-focused broker
  

• Explore pre-built, sublease, and shared space options
  

• Define your priorities early and stick to them
  

Go On Entrepreneur, Be Great!!!

Mel

At Paramount, we go beyond brokerage — we help you build a real estate strategy that drives business value.Thinking about a move but not sure where to start?

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Leases are complex. Landlords negotiate every day — most tenants don’t.
Let’s ensure your lease supports your operations, protects your flexibility, and keeps you from overpaying.

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