Calculate percentage rent for commercial leases based on base rent and percentage amount
Learn how to use the Percentage Rent Calculator calculator and its working principles
Percentage rent is a type of commercial lease where the tenant pays a base rent amount plus an additional percentage of their gross monthly sales above a certain threshold. This type of lease is common in retail spaces and is designed to ensure the landlord benefits from the tenant's success.
Suppose you have a commercial lease with a base rent of $1,500 per month and a percentage rent rate of 5%. If your monthly sales are $50,000, your calculation would be:
$1,500 (base rent) + ($50,000 × 5% or 0.05) = $1,500 + $2,500 = $4,000 per month
Percentage rent is typically used in retail, restaurant, and other businesses where sales volume can vary significantly. It helps landlords share in the success of successful tenants while providing some stability through a base rent.