Father is leasing other half of his building for 3 three year renewals of which we pay commission to the brokers. The contract reads as if commission will be paid out in perpetuity if any deal is made henceforth. Is this commonplace? We are small potatoes FYI located in San Antonio Texas.
[{"id": "dl0pvqu", "text": "All contracts/their terms must have a specified ending date. There is also a \"protected\" list of tenants/prospects when changing brokerage firms. I know some good guys in SA if you need further direction. Feel free to PM me.", "replies": [{"id": "dl0q1cx", "text": "Thank you. It sounded odd to me in the contract, zero experience with commercial real estate aside from going to meetings with my father. Might be sending you a message in the near future. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "dl0zt7d", "text": "You pay upfront, e.g. A dollar per square foot leased, often also per year leased. \n\n5 year lease x 2000 SF = $10,000 LC = leasing commission. \n\n$1 is a rough figure PSF / yr, used for simplicity. ", "replies": [], "depth": 1}, {"id": "dl1kzhq", "text": "In NY brokers typically get paid a commission on renewals.  Normally at a rate of 3%, however I have done many deals where the brokerage commission is capped after 10 years of lease term.\n\nThe commission on renewals or options is paid at the time the tenant renews their lease or exercises their option.  \n\nYou ask the broker to change the agreement to cap the commission after a certain time frame.\n\n\n", "replies": [], "depth": 1}, {"id": "dl1lnz5", "text": "It's customary in Texas for leasing commission to be 4% to the tenant rep and 2% to landlord rep. Many times the renewal is a paid commission (the broker should be engaging and negotiating with the tenant to improve the lease on your behalf) and therefore the fee would be 2%. Anything can be negotiated, this is just what is customary. ", "replies": [], "depth": 1}]