What is the market commission for commercial lease renewal:

Given that commission was 5% of gross rent for initial lease term, I want to know what a corresonding reasonable/typical/market commission for lease renewal would be.
In Leasing Property - Asked by Paragon P. - Jan 13, 2009
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Answer(s)

Kevin W.
Broker/Agent
Lubbock, TX
Premium Subscriber

there is no set rate, but we charge 1/2 of the original lease rate.

Jan 14, 2009
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Juan G.
Broker/Agent
Ontario, CA

I usually see 2%. Those are pretty easy most of the time. However, you may run into times where it is a challenge to retain tenants, in that case the salesman is worth significantly (maybe 4%) more, especially in this market.

Jan 14, 2009
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Christopher K.
Broker/Agent
Ellicott City, MD
Premium Subscriber

Real estate commissions are fully negotiable, and it's dangerous to engage in a dialog in a public forum about specific rates charged. It could be perceived as price fixing which is not kosher.
Speaking generally about the shift in market conditions, I think it's safe to speak to the following trend: In the "landlord's market" of a just a year or two ago, landlords would typically offer 1/2 of the the commission they would pay to a broker that brought a new tenant to them.
Now we're seeing brokers asking and getting a "full" commission on renewals. The landlords are more fearful of losing tenants and are doing what the can to keep the broker that "controls" the tenant happy.
Christopher B. Kubler, CCIM
NAI KLNB
443-574-1415

Feb 21, 2009
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