Q: Tenant pay percentage rent of five percent (5%) of revenue excess of natural breakpoint. Be set using an 8% occupancy.
I would like to know what they are asking for the percentage rent paragraph.
In addition to base rent, Tenant shall pay percentage rent of five percent (5%) of revenue in excess of natural breakpoint (the “Breakpoint”). The Breakpoint shall be set using an 8% occupancy threshold based upon annual base rent + pass throughs. (Breakpoint = ((48+10) * 2,000) /.08 = $1,450,000)
A: Sounds like this is a term of a commercial lease. If you are going to rent commercial space and you don't know what this means, you need to hire an attorney to represent you. having competent legal representation in commercial lease negotiations is a cost of doing business. The other side has an attorney.
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