Commercial Broker's Agreement HELP NEEDED
| Hello, I am the owner of a commercial property, located on a major highway on the east coast. Up until now, I have been operating my business from this location. A commercial broker has approached me with a contract and says he has a bank interested in a possible NNN land lease, for 20-25 years. I told him I need to net out $150K per year, including his commission. He says it may be possible, and will be asking the bank for $175k per year, which would net me the $150k.. but first, we need to come to agreeable terms with a broker's contract between us. Without any prior experience in this field, I have learned what I can about the topic, but would like to know what, and if there is an industry standard regarding terms. After some negotiating, he has offered a non-exclusive agreement, with 5% commission for the aggregate of the lease term (20-25 years), due within 3 installments, first upon bank receiving all final approvals to build, 2nd when the bank starts paying me, and third at the end of the first year of lease. So all in all.. I would pay him about $150k up front, in total, for a 20 year lease agreement, netting me $150K per year,3 million total. I countered with a commission term of only 5 years, but he said the full term of the lease is industry standard and anything less is unrealistic. He is also looking for commissions on future deals for the property, but is agreeing to cap or limit his commissions to 20 years. Your input is greatly appreciated. |