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

In Leasing Property - Asked by timothy j. - Nov 3, 2009
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Mike C.
Jacksonville, FL

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, took me 45 minutes to get it done.

Nov 3, 2009
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Gregory G.
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

Nov 6, 2009
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Chris R.
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
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