NNN Ground Lease what should a Broker expect to be paid (range) on a NNN Ground Lease?

This property is in a desirable area with great demographics. Do you get paid on options?
In Leasing Property - Asked by Lisa T. - May 4, 2011
Report Abuse
Answer this Question

Answer(s)

Rob B.
Chandler, AZ

David...
If it is a credit tenant with a lease of 10 years or more on a ground lease, it is going to be difficult to get the owner to pay on options. Most ground leases will be for a minimum of 10 years.

A general rule is the longer the lease the smaller the commission. It will all come down to the quality of the tenant, the desirability of the ground and the other economics of the lease. I would be very satisfied to get a 2% commission overall on the value of the base rental of a lease that was more than 5 years. Five years and under, I would likely want a 3% over all lease commission.
Many agents will look for a higher commission, since the amount of the lease will be lower because it is a ground lease! Its all negotiable.
Onward and upward David... Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855 Email: rob@capratecommercial.com

May 4, 2011
Report Abuse
J. R. / Jack M.
Newport Beach, CA

David:
Since the year 1990 I have only represented Buyers/ Lessees. I execute a Buyer-Broker agreement upfront and then only after I have concluded at least one transaction representing them as a paid Consultant earning $250 / hour against pre-paid retainers. As a Consultant, I earn not only the hourly rate but also a bonus at close of escrow or upon bilateral execution and delivery of the Lease Agreement, plus satisfaction, waiver or removal of all lease contingencies. The amount of the bonus is negotiable. For easier to find sites it has been as low as $25,000. For difficult to locate sites it has been as high as it is right now at $100,000. The client's obligation to pay the Bonus Fee is credited by whatever amount has been paid me to date at the hourly rate.
Working as a broker, a fee of 6% of the firm term rent commitment is guaranteed by the client less whatever I receive from the seller / lessor. Zero is paid me on lease extensions. For some of my 30+ clients the minimum fee is $100,000 per transaction because qualified, potentially high volume, new-to-industry, EXPRESS Exterior Tunnel Carwash sites are very hard to find....but after just 6-12 months of operation they usually cash flow at $1,000,000 or more annually.

May 5, 2011
Report Abuse
JOHN R.
Broker/Agent
Tampa, FL

TYPICALLY 1-2% SINCE GROUND LEASES ARE USUALLY LONG TERM. I TRY TO NEGOTIATE A % OF OPTION $ PAID TO SELLER/LANDORD, WHICH IS SUBTRACTED FROM COMMISSION IF BUYER/TENANT EXERCISES OPTION.
JOHN REAVES

May 12, 2011
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question