Acceptable lease commissionsand PM fees for retail
Hi everyone

I was curious what everyone thinks industry standard is for lease commission for retail properties specifically in the sunbelt states. Any insight is appreciated!
[{"id": "i0l4sa0", "text": "Representing landlord or tenant?  If tenant, 4.0% for up to 10 years. If landlord, whatever you can get.  \n\nSource: I\u2019m an asset manager for a privately-held investment company with 80% retail in sunbelt states.", "replies": [{"id": "i0p99g4", "text": "Is that 10% of the gross income or net income? And that\u2019s annualized? By whatever you can get could you clarify a bit more. I just would like to know what the standard is for neighborhood shopping centers, small strip centered etc", "replies": [{"id": "i5kt7qn", "text": "If retail, then it will probably be a net lease. So, commission would be earned on the \u201cbase rent\u201d (can go by other names). An example would be there\u2019s a 1,600 SF suite that is $25.00 PSF base with $10.00 PSF for NNNs. The term is 60 months. The broker is only paid on base rent, so 1,600 x $25.00 = $40,000 / 12 = $3,333.33/month x 60 = $200,000 x 4.0% = $8,000 commission. \n\nRegarding the landlord\u2019s broker, he/she would have to negotiate with the landlord on what commission rate they would be paid. The landlord might pay 2.0%, 3.0% or maybe even 4.0%. There\u2019s less consistency in what landlord brokers get, whereas 4.0% to the tenant\u2019s broker is more standardized.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i0m7wk7", "text": "I am a landlord. We list our own properties and do all the heavy lifting on lease negotiations. When I negotiate with a procuring broker, I try to get 3.5% on initial term only. That's usually five years. I then pay that with three payments over the first year. This is my starting offer. Responses vary a lot. Many brokers accept without any push back. Sometimes I get agents that are irate and insulated by the offer. Depending on the strength of the tenant, I negotiate, sometimes up to 5%. I'm in a unique spot because we dominate this particular market, lots of buildings, highest rents, very generous TI, and very low vacancy. I have some leverage.", "replies": [], "depth": 1}, {"id": "i0mtxx9", "text": "How long is the lease and is it a local tenant or a national tenant??  Is it a building lease or a ground lease ?", "replies": [{"id": "i0zb4ew", "text": "Is a ground lease commission different?", "replies": [{"id": "i4mmd4l", "text": "Yes. Of course.  Ground lease usually means major tenant capital improvement and minor Landlord costs.  And almost always means much longer initial lease term.  Therefore higher Comission than a building lease.", "replies": [{"id": "i4nof2h", "text": "Right longer term, this was a dumb question. Same %.", "replies": [{"id": "i4p0sn1", "text": "Not really.  Is there a co-broker or not?  If there is a LL broker and a T broker, then the formula would likely be different than if it was direct to the LL and only a T broker.  Anyhow, lets say a direct deal had just a T broker, it was Panera Bread for a 4,500sf end-cap no drive thru, corporate store, 10 year lease.  that would probably be 5% straight on the 10-years.  Same direct deal with Chick-Fil-A on a 20 year ground lease would probably be 5% straight on the first 10-years and 2% or even 3% on years 11-20... or something like that... your mileage may vary... but my point is not same % rate all the way.", "replies": [{"id": "i4sj65v", "text": "Interesting on sliding scale 10-20 years. Thanks. I\u2019m doing a lot of 10 yr existing space, 4-6% mostly. Costs seem too high on new build free standing QSR right now.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]