What is Typical Commission Scale on Tenant Lease in Midwest
I'm an owner of a retail space and didn't hire a broker to advertise space. A Broker came to me with a tenant who wants to sign 10-year lease. Along with LOI, office sent a commission agreement for 6% aggregate years 1-5; 3% years 6 - 10. Everything is negotiable. What is a reasonable rate to agree upon?
[{"id": "iw9j0jm", "text": "That\u2019s market if you don\u2019t have a broker working on your behalf. If you did, tenant rep would be 4% 1-5 and 2% 6-10. They get the extra percentage because they\u2019re going to be doing more work since you\u2019re not represented by a broker", "replies": [], "depth": 1}, {"id": "iwd1c5n", "text": "There is a point in the comments about how it is more work for the tenants agent because you are an owner.  If you are in fact completely green and don't know where to start with contract creation and terms, that would make sense.  But I am quite sure that is not the case.  I would guess you know what terms you want, may even have a lease drawn up, a process to vet the prospective tenant, or you maybe even be a seasoned owner-investor.  In that case, I would offer the 4% for 1-5 and 2% for 6-10.  And when you offer that, realistically you'll end up paying 5% and 3%, respectively, very likely.  Hope this helps.", "replies": [{"id": "iwd7td6", "text": "Thank you, powerup759. You're right: I know my terms, I have a lease ready to sign, and have already vetted the tenant. Already agreed to TIA. The only thing the broker is doing is making phone calls to his client. Thanks for your advice.", "replies": [], "depth": 2}], "depth": 1}]