Percentage Rent
A rent structure in which the tenant pays a base rent plus a percentage of sales above a specified breakpoint. Percentage rent is most common in anchored retail centers, where it aligns the landlord with the success of the tenants business. The structure has historically given landlords an additional upside lever when retail sales rise above expectations, while also exposing landlords to downside when tenant sales decline. Percentage rent is one reason landlord financial disclosures often include same-center sales-per-square-foot trends alongside base-rent figures.
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Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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