Would the usual commission structure for office space be the same for retail space in a given area like NYC?

In Leasing Property - Asked by Francisca M. T. - Jun 27, 2012
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Answer(s)

Rob B.
Chandler, AZ

Francisca....
This question is asked so frequently by individuals engaging in the real estate profession in the US, that it likely becomes tiresome for some people to answer. However, there are no "dumb questions" asked, there are only sometimes "dumb answers", so every question deserves an answer.
The answer is that all commissions in real estate are negotiable and it is against the law to have a standard industry commission. Therefore, you are not likely to get any other answer than this. If you do, be a bit wary as it may just be information that is illegal.
The best way to know what commission to charge is to know what your time is worth; all marketing expense connected with serving a customer; and, what your general overhead is so a percentage representing that can be considered as well. All commissions should be tied to a value standard for the licensed person that is charging for his or her professional knowledge and the time required to use that knowledge in a successful result for your client. For without success there is no commission!
Onward and upward to developing your professional knowledge!
Rob Baird
rob@capratecommercial.com

Jun 29, 2012
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Rob B.
Chandler, AZ

Francisca....
I have been thinking a bit more about your question. The answer that I gave previously remains pertinent. However, your question was about structure.
In every lease, the way you structure your commission is up to you. There are many variations that brokers use, but in the end it is what is going to be the most attractive structure for the Lessor, while you still get paid a fair commission. It will all come down to dollars and how those dollars are earned and paid!
Onward and Upward....
Rob Baird
rob@capratecommercial.com

Jul 2, 2012
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David C.
Broker/Agent
Mount Prospect, IL

I work in Chicago and not New York. However the commission that I receive from or typically pay co-operating brokers is the same; either a percentage of the rental amount for the first year of the lease + a lower percentage of the rental amount for the remaining term or a set dollar amount per foot per the number of years of lease. Either way, typically, it equals the same amount. Hope this helps.

Jul 25, 2012
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