Leasing Commissions - Typical Structure for office, industrial, and retail leases
How are leasing commissions typically structured for office, retail, and industrial leases?

What is the typical percentage of base rent that is paid?

Over what period of time is the commission paid?

How are the commissions different for new leases vs renewals?
[{"id": "hpn2py4", "text": "I focus on retail and typically shoot for 5%/6%. Typically, commissions are a percentage of the total rental value (may also include a % of the taxes as well depending on the state). I always push for getting paid on executed options as well. Every LL is different on when you get paid so that depends on how creative you are. You may ask for all of it upfront (depending on the tenant's credit) a portion due at lease signing and the rest, say 6 months from now, or if they are really being cautious, getting paid on the anniversary date of the executed lease date. I say aim high and see what happens.", "replies": [{"id": "hppiqbj", "text": "You you get paid for executed options?\n\nNo wonder that fucking broker was pushing so hard\u2026", "replies": [{"id": "hpt5k9o", "text": "My thought is you gave the landlord value, potentially $250,000 for a five year lease(whatever number you want to calculate), pending risk of course. Why not get paid for that? We only get crumbs as it is.", "replies": [], "depth": 3}], "depth": 2}, {"id": "ibq72fi", "text": "Do you push for 5 or 6% on the executed lease options?", "replies": [], "depth": 2}], "depth": 1}, {"id": "hpn2yis", "text": "I usually charge 6% for all commercial leases. \nThe lease is paid for all of the initial term plus any extensions if executed. I deal with renewals for certain clients and usually charge 3% for dealing with those clients exclusively and representing the landlords interests. I have charged less on larger leases but they tend to be very large commercial leases. \n\nIf your getting into commercial real estate it\u2019s a place to start but not to live off of long term. Don\u2019t expect it to be less work, it\u2019s usually more work and takes longer than a sale.", "replies": [], "depth": 1}, {"id": "hpn4f94", "text": "The structure may be different depending upon where you are located...and it can be different for the different product types. On my agreements, I typically split the fee 50/50 with a procuring broker and I rarely get paid on renewals. 5-6% will be most common....I have seen a number of agents split office deals 2% for the listing side and 4% to the procuring broker. Most other product types (retail and industrial), I usually see a 50/50 split. Many agencies use an adjusting basis 6,5,5,4,4 based on the number of years of the lease and the % usually is cut in half for years 6+.\n\nWe try to collect 50% when the lease is signed and 50% when the tenant has taken possession and is open for business.....this causes a significant lag in getting paid on retail deals, especially restaurants or other uses that need T/I work and government approvals prior to opening for business. Many times, the landlord will pay you on their schedule and not on yours.", "replies": [], "depth": 1}, {"id": "hpnaj1i", "text": "On the LL side and in general we pay 4-5% when no procuring broker and max 7% total with both sides rep\u2019d and let our listing broker negotiate to their hearts content with tenant side.\n\nWe pay half up front when tenant pays deposit and first months rent at signing and then second half at opening. \n\nOutside of crazy exceptions we do not pay any commission on renewal. \n\nHave seen a lot of fancy back and forth and brokers arguing about different splits and fees for retail, office, industrial but never really seem a clear pattern emerge. Usually it depends entirely on quality of the procuring broker. They bring good solid tenants quickly and they get solid splits.", "replies": [], "depth": 1}, {"id": "hpnaobm", "text": "Is 5-6% leasing commission common in the Bay Area for retail as well? Seems like quite a bit since commercial rent is so high here.", "replies": [], "depth": 1}, {"id": "hpo3fuk", "text": "Depends on the agreement but in general I\u2019ve seen:\n\nStarting at 5% the first year and declining percentages every year for the life of the lease of base rent (not percentage rent)\n\nNew leases are typically paid 50% at signing and 50% at open or payment of second months rent. \n\nRenewal/extensions are usually paid 50% of what a full calculation would be upon signing or renewal date. \n\nWhen external brokers are used they get full commission and internal gets 25% of a full commission.", "replies": [], "depth": 1}, {"id": "hppkguq", "text": "This can be regional.\n\nGenerally, in my metro:\n\nLeases are $1/sf /yr \nSales are 5% - split can depend on the work perceived by the listing broker or 2.5%\n\nDetails vary based in negotiation between the brokers.\n\n(Source: former regional CMLS and CoStar employee. cMLS req'd commission details)", "replies": [], "depth": 1}, {"id": "hpqobu5", "text": "Depends on the deal and area. \n\nAZ Office Lease - 5% for first 5 years on the tenant side; 2.5% to LL side for total of 7.5%.\n\nAZ Retail Lease - 6% split\n\nAZ Industrial Lease - Depends on the deal. \n\nSales - Depends on the size. \n\nSource - am broker.", "replies": [], "depth": 1}, {"id": "hpu5nsu", "text": "Industrial NNN Leasing:\n4.5% of NNN rent over entire term to landlord broker. If tenant rep broker involved, the fee increases to 6.75%. LL broker gets 2.25% and tenant rep broker gets the 4.5%. He who brings the tenant is rewarded, and the LL broker is incentivized to get the deal done themselves. \n\nFee is paid half at signing and half at commencement. \n\nRenewals are the exact same structure, so long as broker is \u201cactively involved\u201d in the transaction. That\u2019s a whole different conversation.", "replies": [], "depth": 1}]