Definition
Additional rent paid by retail tenants based on a percentage of their gross sales above a threshold, common in shopping centers. It's the landlord's way of ensuring they profit from your business success while you bear all the risk.
Example Usage
The boutique paid base rent plus 7% of gross sales exceeding $500,000 annually, turning a successful year into an expensive one.
Origin
Retail leasing practice from early 20th century department stores, formalized in modern shopping center leases
Fun Fact
Some retail leases are entirely percentage-based with no base rent, common for temporary pop-up shops or kiosks in high-traffic locations.
Source: Commercial retail leasing standards
Related Terms
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See “percentage rent” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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