Operating expense and Commissions

I recently listed a 3,093sf office building, furnished, for lease.
I know there is no standard for commissions, but is it typical to include the operating expenses in the commission calculation or is it more often calculated using the gross lease only?
Thank you.
In Leasing Property - Asked by Jason C. - Jan 26, 2010
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Answer(s)

Andy N.
Owner/Investor
Saint Paul, MN

I would suggest determining a valuation of the property, which either your buyer and/or an appraiser will do so as part of a sale, will project income less reasonable operating expenses to determine a NOI (Net Operating Income). Then, once this is determined, a market cap rate will be used to determine value.
At the end of the day, brokers typicall are paid a percentage of the total sales price. I would suggest for this scale deal, a 6-7% commission would be reasonable.
Andy Noble

Jan 26, 2010
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Jason C.
Broker/Agent
Coral Springs, FL

I appreciate your answer, Andy. I was asking in regards to a lease commission and whether or not the rental commission is based off of the gross lease price (not including operating expenses) or off of the net lease price (including operating expenses).

Jan 26, 2010
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Robert T.
Broker/Agent
Bethesda, MD

It is common to include operating expenses as part of the commission calculation for office leases when using gross leases.

Jan 29, 2010
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Kathy S.
Broker/Agent
Petaluma, CA

If it's a full service lease wherein the operating costs are included in the rent, the commission would be paid on the total. If the operating costs are listed separately in the lease, the commission would be paid on the base rent only.

Feb 16, 2010
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