Percentage Lease

A percentage lease is a rental agreement often used in commercial real estate, where the tenant pays a base rent plus a percentage of their sales revenue. For example, a retail store might pay a fixed monthly amount and then an additional 5% of its sales. This type of lease aligns the interests of both the landlord and tenant, as the landlord benefits when the tenant's business succeeds. It provides flexibility for the tenant during slower sales periods while ensuring the landlord receives a share of the tenant's profits.