Commercial broker lease commission rates ?

3 Replies

Hey guys and gals

Can you guys tell me if this is the norm,
this is from a listing contract that was presented to me yesterday.

Thanks for any input

Steve

Referencing Lines 28-32: Broker's commission
shall be: the greater of four percent (4%) of the average annual rent over the term or $4.00 per
square foot, 1/2 paid upon execution of the lease and 1/2 paid upon occupancy. In the event of a
co-broke, commission shall be an additional fifty percent (50%) of said amount. 9)Reference Lines
238-239: This Listing Contract shall continue to renew for consecutive six (6) month periods or
until which time Seller delivers to Broker a thirty (30) day written notice to terminate this Listing.

It's whatever you negotiate.

There is nothing outrageous I see there.

There is a bunch of risk as a leasing broker.Used to they would take more on the monthly and less upfront but with this economy many businesses that sign a lease do not last and the broker ends up chasing money for a bunch of work upfront.

I don't do leasing only sales.Too much risk and time and not enough money in it.Make sure they do leasing all the time and have the proper network to market your property and get it filled with a quality tenant and are not a "jack of all trades".

I just got quoted on a three year commercial NNN lease from a broker in Central PA
1st year = 1 month
2nd year = 6% yearly rent
3rd year = 5% yearly rent
Percentages are on single net

and also he is "Negotiable"
Since he is our commercial broker for acquisitions we may get a better deal than otherwise.

I'll report back on my negotiation skills.
;c)

Cheers,
Mark

For our company in DFW, office leases pay 4.5% for a tenant rep and 2.0% for the listing broker (us). If no tenant rep then we pay ourselves 4%. It's been a little while since we've paid a retail lease commission, but it sounds like you are in the ball park.

Often times, we pay the tenant rep on a renewal even if he did not participate in the negotiations of the renewal. Usually to keep a good relationship with the brokerage community.

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