Free Percentage Rent Calculator

Calculate the additional percentage rent owed by a retail tenant when gross sales exceed a specified breakpoint.

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Annual Percentage Rent

$12,000

Total Annual Rent (base + percentage)$48,000
Sales Above Breakpoint$200,000
Average Monthly Total Rent$4,000.00
Total Rent as % of Sales6.00%

Annual Percentage Rent vs Percentage Rent Rate

View formula & how it works →

Percentage Rent in Retail Leases

Percentage rent is additional rent paid by retail tenants based on their gross sales above a breakpoint threshold.

How It Works

1. Tenant pays a guaranteed base rent regardless of sales 2. When gross sales exceed the breakpoint, tenant pays additional rent as a percentage of the overage

Breakpoint Types

  • Natural breakpoint: Base Rent / Percentage Rate (e.g., $36,000 / 6% = $600,000)
  • Artificial breakpoint: A negotiated threshold that may differ from the natural breakpoint

    • Percentage Rent Formula

    Percentage Rent = (Gross Sales - Breakpoint) x Percentage Rate

    Common Percentage Rates by Type

  • Supermarket: 1-2%
  • Department store: 2-3%
  • Restaurant: 5-7%
  • Specialty retail: 5-8%
  • Service businesses: 6-10%

    • Example Calculation

    A retail tenant with $800,000 in annual sales, $36,000 base rent, 6% percentage rate, natural breakpoint at $600,000.

    1. 01Natural breakpoint: $36,000 / 6% = $600,000
    2. 02Sales above breakpoint: $800,000 - $600,000 = $200,000
    3. 03Percentage rent: $200,000 x 6% = $12,000
    4. 04Total annual rent: $36,000 + $12,000 = $48,000
    5. 05Average monthly rent: $48,000 / 12 = $4,000
    6. 06Total rent as % of sales: $48,000 / $800,000 = 6.0%

    Frequently Asked Questions

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