Interested in data/experience/expectations on commission structure for NNN leases
My basic question is what's the standard/experience on paying commission on total collection as opposed to base rent?  We've historically paid on base and that's the agreement we have with our landlord rep.  My position has been that NNN is simply a pass-through and I don't ultimately see any of that money - not in operating benefit nor in valuation.  Would most definitely appreciate others' perspectives.
[{"id": "gzbe5re", "text": "We do standard 6% of the aggregate total lease amount signed upon.", "replies": [{"id": "gzbhnqa", "text": "Thanks.  To clarify, are you owner or broker?", "replies": [{"id": "gzbtrpz", "text": "Broker. Our company\u2019s owner who owns 1.5M+ sqft of mixed space uses the same %. Easy to split commissions if there\u2019s 2 parties, higher incentive than 5%. Not recommending anything, just sharing our approach.", "replies": [{"id": "gzeieso", "text": "At the company where I worked, we did something similar-", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gzbjj0g", "text": "I\u2019ve personally never seen someone take commission on the NNNs, only base. I\u2019m not even sure how you\u2019d calculate a percentage of future year pass throughs that you can\u2019t even know at this point if it\u2019s a true NNN lease.", "replies": [{"id": "gzcbxnb", "text": "I agree with that. I presume they'd use current NNN/CAM rate forward.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gzc8j2b", "text": "Will completely depend on your market, but in TX I am used to seeing landlord paying 6% on est gross rents (so base plus est opex). Opex used is yr 1 estimate for each year of term. 2% to LL rep and 4% to tenant rep. \n\nI think some markets are on a psf basis instead.", "replies": [], "depth": 1}, {"id": "gzegiau", "text": "I've never seen anyone use anything but the base in my market.\n\nPersonally if I wanted more money I'd just ask for a higher percent.  Commissioning the expenses sounds like a huge head ache for a variety of reasons.", "replies": [{"id": "gzgmspo", "text": "Thanks, and agreed.  Like I say, seems like BS.  On the building with the lease proposal that triggered this question, CAM/NNN is almost half the gross so commissioning on them would effectively double the commission.", "replies": [{"id": "gzgnj4g", "text": "To be candid if expenses are half the gross paying more commission than market on base probably is fair.  What caused that circumstance?", "replies": [{"id": "gzgnuqa", "text": "I'll PM you as it might be a bit close to identifiable.", "replies": [{"id": "gzh0hjo", "text": "Not BS in some states/markets as mentioned above. As far as commissioning CAM/NNN the owner will have budgeted expenses for the year and that figure is used to calculate aggregate rent over the term plus base along with included rent steps. \n\nI know you\u2019re hesitant to highlight why your bldg has increased expenses, have they always been historically high? Or was this a one time thing?", "replies": [{"id": "gzh9a8x", "text": "One issue is Texas is a non disclosure state.  My transaction was public.  So, my property tax per SF is about double my neighbor's.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gzelei2", "text": "I am in California, practicing in commercial since 2007. I haven't ever been paid on NNN or CAM fees, only on Base rent. We charge 1% more on NNN leases than modified gross leases. We split our commission fee 50/50 between listing and tenant rep.", "replies": [{"id": "gzgmlvj", "text": "Thanks!", "replies": [], "depth": 2}], "depth": 1}]