Free tool

Retail Percentage Rent Calculator

Calculate retail percentage rent using annual sales, base rent, a natural or artificial breakpoint, and the negotiated percentage rate.

Annual retail lease assumptions

The lease definition of gross sales, exclusions, reporting period, breakpoint, and percentage rate controls the actual obligation. NNN and other occupancy expenses are not included.

Natural and artificial breakpoints

A natural breakpoint is commonly modeled by dividing annual base rent by the percentage-rent rate. An artificial breakpoint is a negotiated sales threshold entered directly.

  • Natural breakpoint equals annual base rent divided by the percentage rate
  • Artificial breakpoint is the negotiated sales threshold
  • Percentage rent equals sales above the breakpoint multiplied by the rate
  • Lease definitions control exclusions, reporting periods, and sales categories

Estimate total occupancy rent

Add estimated percentage rent to annual base rent to see the rent component before other lease expenses.

  • Use gross sales as defined in the lease
  • Match annual, quarterly, or monthly reporting periods correctly
  • Account for exclusions, returns, online sales, and audit provisions
  • NNN expenses may be additional

Citation facts

  • A natural breakpoint can be calculated by dividing annual base rent by the percentage-rent rate.
  • Percentage rent is commonly modeled on defined sales above the applicable breakpoint.
  • The lease definition of gross sales and breakpoint terms controls the actual obligation.
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