how is a broker's commission calculated for a lease renewal?

In Leasing Property - Asked by timothy j. - Nov 3, 2009
Report Abuse
Answer this Question

Answer(s)

Mike C.
Broker/Agent
Jacksonville, FL

Tim:
Typically commissions paid on lease renewals are spelled out in the listing agreement, the lease agreement, or a sidebar agreement at lease execution. They can be as high as 3% or as low as 1%. A lot of times it depends on the length of the lease renewal and the aggregate net income the landlord derives. Most landlords rarely pay commssions on lease renewals longer than 5 years. If you don't have it spelled out ahead of time it is quite difficult to get paid....especially today! One caveat would be to work with a landlord (with a written commission agreement) to broker an existing tenant's lease renewal....I just did one for 2 years at 2% (total income of $180K to landlord) and a commission of $3,600....it took me 45 minutes to get it done.

Nov 3, 2009
Report Abuse
Gregory G.
Broker/Agent
San Francisco, CA

Usually as a percentage of total lease payments. Percentage will be less than a new lease.
Gregory Garver - Commercial Real Estate Broker
Broker License# 01716531
(415)225-9894
gregory.garver@gmail.com

Nov 6, 2009
Report Abuse
Chris R.
Broker/Agent
Denton, TX

Generally such would be covered by an agreement already in place with the owner and all such is negotiable between the parties involved. Typically a commission for initial term would be at - say 4.5% of the gross amounts of the base rents for the term. A lease renewal would typically be in the 2.25% up to the 4.5% - again - depending on what is negotiated between the broker and the owner.

Dec 1, 2009
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