In real estate, a percentage lease is a leasing arrangement most commonly used for retail properties in which rent is based in part on a percentage of the tenant’s gross or net sales. This structure aligns the interests of the landlord and tenant by linking rental income to the success of the business.
Percentage leases typically include a minimum base rent that is payable regardless of sales performance. If sales exceed a specified threshold, additional rent is calculated based on the agreed upon percentage, providing the landlord with the potential for increased income during periods of strong business performance.
