Broker commission agreements
For the commercial brokers representing the tenant-

How do you calculate your commission? Do you treat each deal different and if you do, why? 


[{"id": "cpwmnnu", "text": "It depends on the market and product type. Here in Chicago, the Landlord pays the commission and, for office tenant rep, the calculation is $1.25/sf per year of term. So a 10 year/10,000 SF deal would be (10,000 x 1.25) (10) = $125,000 gross.\n\nDepending on splits, typically about 1/2 of the commission goes back to the company.\n\nIndustrial is more market based, but usually around 2-4% of the gross rent consideration. Same with retail I think?\n\nAgain, however, different markets have different structures.", "replies": [{"id": "cpwnnde", "text": "3-4 percent for office/retail seems common here for tenant side rep.  I've never done industrial leasing, I'm not sure how that works.", "replies": [], "depth": 2}, {"id": "cq64uxu", "text": "$125000 commission seems like a lot for 10000/SF. \n\nIs this normal?\n\nI'm thinking commissions for tenant would be 3% of the initial term, so 20/SF for 5000/SF of space for 10 years, 3% would be a $30k commission for one side. \n\nI'd like to hear more about different commission calculation/terms", "replies": [{"id": "cq6hg8t", "text": "That's the rate used in downtown Chicago office deals, but every market is different.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "cpwnv9s", "text": "A lot of this winds up getting negotiated with the landlord.  Particularly when renewal options, options to purchase etc come into play.  \n\nI treat 90% of deals exactly the same.  10% maybe there is something special going on.  That can mean they seem flakey as shit and I want a retainer or am putting a minimum in, or maybe I just realize I want to do the deal and will take a loss.  \n\nI'm doing one like that now.  A neighborhood friend is looking for a small space for his business (which is really new and already expanding, plus has a GREAT following).  He is well connected and I think I can a- get a lot of referrals off that deal and b- if he continues to grow like he is now the next deal with him is going to be large and there is a potential for lots more.  So I'm doing a small ass deal I wouldn't usually have any interest in and I don't really care to shake him down for some huge commission on the deal size.  \n\nAll RE is situational.  Do whatever makes sense for YOUR BUSINESS and be prepared for people to say no and go to the guy who is a jerkoff that offers 0 services, but won't make them agree to any rep.  While you are doing real deals with clients who respect you he will get screwed left and right.  \n\nThe deals you turn down make your more than the ones you close sometimes.", "replies": [], "depth": 1}, {"id": "cpyju2o", "text": "Every market is different...", "replies": [], "depth": 1}, {"id": "cpyopib", "text": "Here in NC we get 3% in all product types. If it's a smaller unit &lt;2000 SF I'll ask for 4%. \n\nThen I split it with the house 50/50. ", "replies": [], "depth": 1}]