What is standard leasing broker commission for orange county retail space?

10 year lease
In Leasing Property - Asked by Liz H. - Jun 2, 2010
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Answer(s)

Sheri M.
Broker/Agent
Pasadena, CA

In Orange County, California it the standard would be six percent. Three percent to each side. Many Landlords will only pay that for the first 5 years of the lease even if it is ten year term. Additionally, there may be many factors considered like NNN, TI's that also will affect the commision pay outs.

Jun 2, 2010
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Rob B.
Chandler, AZ

There is not a specific answer that should be given to this question. There are many factors that influence a commission on a lease. Generally a commission is constrained on how much value the lease will have to the Lessor.
Is the property listed by another broker? How well is the property located for retail traffic? Are there credit tenants in the retail center? How much vacancy does the Lessor have? How long has the space been available? How much TI must be done? What is the credit standing of the prospective tenant? How long is the lease and what are the future increases? What is the total value of the lease?

A Lessor must show a good return on his space considering his total costs, including commissions. The Lessee is looking for price, TI and term considerations. The secret to getting everyone paid is finding a balance in the lease for both the Lessor and the Lessee. Is six percent (6%) to be split between two agencies a fair amount? Is 2%-4% a fair split? Is less than 6% fair if the listing agent is handling both sides? When is more than 6% justified and obtainable? Whenever, it does not throw the total economics out of balance for Lessee and Lessor may be the best answer.

Jun 3, 2010
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Kathy S.
Broker/Agent
Petaluma, CA

There isn't a "standard commission" since commissions are, by law, negotiable. For the Class A retail, commissions are often set as a specific dollar rate per square foot based on the number of years. For example, a 4000 sf store leased for 5 years would be based on the 4000 sq.ft. and the 5 year term --- not on the actual rent. The dollar rate may be a sliding scale, e.g. $2 x 4000 sf x 3 years plus $3 x 4000sf x 2 years.

Jun 3, 2010
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Run A.
Researcher
Anaheim, CA

Is it possible to "ballpark" the commission? What is the average commission paid? Is there a minimum or maximum?

Jan 24, 2011
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