Broker Commission on an F&amp;B lease with no base rent - landlord will be paid percentage of gross sales.
What is a typical commission fee structure for a lease where there is no base rent and the landlord is getting paid annually from the tenants gross sales? I’m an agent and my broker is not being helpful with this told me to just get the best deal I can.
[{"id": "hybvaf4", "text": "How big is the space how much is the percentage rent. At any point does it convert to base rent?", "replies": [{"id": "hybwmjf", "text": "3,000 SF - 5% of gross sales with a cap at $4.8M. Doesn\u2019t ever convert.", "replies": [{"id": "hybxane", "text": "How many years?  \n\nIs the deal signed? It doesnt make much sense.. \n\n4.8M x .05 is 240k a year potentially for Landlord. Are you in the Bay Area? That\u2019s a high sales number.. \n\nSuch a strange deal I don\u2019t get why it wouldn\u2019t convert to a base rent if they are doing over a couple mill in sales a year they should be paying  rent.. \n\nMaybe try for 5k a year for every year they are open and operating?", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hybxngs", "text": "You need to assume a revenue number that would give the Landlord a market rate on the rent and use that to calculate a commission.  Your assumptions should be readily available online based on the specific use, just look for sales per SF, rent as a percent of revenue, comparable property.\n\nEx.  $400/SF sales x 7.5% rent = $30/SF x 5,000 SF x 10 years  = 1,500,000 gross rent x 3% tenant rep fee = $50,000.", "replies": [], "depth": 1}, {"id": "hyc1ncv", "text": "These deals are not common. There is usually base rent with a break point and your commission is solely off base rent. \n\nIf you are representing the Tenant, write a flat fee in the LOI. This will be part of the negotiation process.\n\nIf you are representing the landlord, just charge a flat fee to represent. The landlord will have to negotiate a flat rate for the buyer's broker if they bring one.\n\nIn either case calculate what market value for the commission would be and start there. \n\nGood luck OP!", "replies": [], "depth": 1}, {"id": "hyc4ys0", "text": "Ya I know it\u2019s a weird situation how it arose\u2026thanks for help!", "replies": [], "depth": 1}]