Percentage Lease

AAA

DEFINITION of 'Percentage Lease'

A type of lease where the tenant pays a base rent plus a percentage of any revenue earned while doing business on the rental premises. It is a term used in commercial real estate. Percentage lease agreements can often decrease the base rate while simultaneously providing the lessor with additional upside potential.

INVESTOPEDIA EXPLAINS 'Percentage Lease'

A percentage lease is a lease where the rental is based on a percentage of the monthly or annual gross sales made on the premises, usually coupled with a base rent. This is a common lease type for retail stores operating in leased spaces, where the tenant pays a base rent regardless of profits/losses plus a percentage of revenue earned as a result of conducting business on the premises.

RELATED TERMS
  1. Recapture Clause

    A provision usually found in percentage leases, especially in ...
  2. Gross Lease

    A type of commercial lease where the landlord pays for the building's ...
  3. Capital Lease

    A lease considered to have the economic characteristics of asset ...
  4. Lease

    A legal document outlining the terms under which one party agrees ...
  5. Operating Lease

    A contract that allows for the use of an asset, but does not ...
  6. Commercial Real Estate

    Property that is used solely for business purposes. Examples ...
Related Articles
  1. Home & Auto

    Rental Properties: Cash Cow Or Money ...

  2. Taxes

    Tax Deductions For Rental Property Owners

  3. Home & Auto

    Simple Ways To Invest In Real Estate

  4. Fundamental Analysis

    What is the difference between cash ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center