Is one month rent per lease year a typical broker compensation? For the seller's broker on commercial property

In Leasing Property - Asked by John R. - Mar 4, 2017
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Answer(s)

Juanita A.
Broker/Agent
Hallandale, FL

Hello,
Not in my experience. The one month rent's compensation is more typical in residential leases but in commercial leases, compensation is usually a percentage of the gross amount of rent. The amount may depend on the length of the lease, effort needed from the agent, etc. and is always negotiable.

Mar 6, 2017
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April B.
Broker/Agent
Denver, CO

Juanita is correct in her answer, but keeping in mind, there is no set "standard". The commission will also vary on the type of lease. For example, a modified gross lease with a monthly rental amount of $6K/month, for a three year lease (avoiding the acceleration to keep it simple) results in a $216K gross amount, in which the commission would be based off of a percentage of this amount. However, a NNN lease, that has a $15/SF + $4NNN, typically, you would not have a commission on the NNN amount, only the base rent for this lease type. Again, there is no standard for commission, but this is usually the formula for commercial properties.

Mar 14, 2017
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Chris S.
Broker/Agent
Coeur D'alene, ID

No standard, but in most cases lease commission is based on a percentage of the gross base rent over the entire initial term of the lease. Also, commissions are usually paid at leased execution not over the term of the lease.

Mar 16, 2017
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