Is it common on new office lease landlord pay leasing agent commission 1st mo.base rent plus 4% gross rental?

Currently trying to lease a office space in Atlanta Ga. The broker is asking commission to be 1st month base rent plus 4% of gross rental. Is it a common practice in Atlanta for leasing broker to include 1st month base rent as part of the procurement fee??
In Leasing Property - Asked by dennie n. - Jun 25, 2013
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Answer(s)

Jessica M G.
Broker/Agent
Bethel, CT

The industry standard is: The commision is 6% based on the aggregate amount of the lease base rent for the first 5 years// the next 5 years at 3 % and anything after being 1.5% . A one year lease commission is typically the equivalent 1 months rent

Jun 25, 2013
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dennie n.
Property/Asset Manager
Milton, GA

So, my broker is asking 1 month rent on top of 4% of gross rental as total commission. Is he asking too much??

Jun 25, 2013
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Patrick K.
Broker/Agent
Cypress, TX

"Is he asking too much" is a relative question. Paul S gave a very typical overview.
Relative to the brokeage fee....How long has the broker had the listing? How many qualified prospects has he brought you? Is this current prospect a high quality/high credit tenant that will pay on time? Give you no problems as a tenant?
A broker's fee is a function of his time, expertise, diligence, quality of work etc. Besides, the fee paid should already be spelled out in the listing agreement.

Jun 26, 2013
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joe d.
Broker/Agent
Mason, OH

You have a couple of great answers so far, and I'd like to reiterate that this should be spelled out in the listing agreement and agreed on before hand. With that said there are a number of other factors that can influence this. Do you have other spaces available he will be listing? Is he going to be handling renewals on the other spaces? What are the anticipated lease amounts and terms? Commissions are generally negotiable based on a multitude of factors, just keep in mind you do not generally benefit from using the cheapest broker and the great ones will pass on your property if it means they are not going to be fairly compensated.

Jun 26, 2013
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