A retail tenant signs a lease that requires paying a base rent of $3,000 per month plus a percentage of gross sales exceeding $500,000 annually. What type of lease is this?
Correct Answer
B) A percentage lease that combines base rent with a share of the tenant's sales revenue
A percentage lease requires the tenant to pay a base rent plus a percentage of gross sales above a specified breakpoint. This type of lease is common in retail shopping centers where the landlord benefits from the tenant's commercial success.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Leasing Property Management Question
Background Knowledge for Leasing Property Management
Real World Application in Leasing Property Management
Common Mistakes to Avoid on Leasing Property Management Questions
Related Topics & Key Terms
Key Terms:
More Leasing Property Management Questions
A Kentucky licensee encounters the principal broker pays property expenses. What should the licensee remember?
In Iowa, a property management agreement is signed. Which statement is correct?
Which Kentucky rule applies when a client hires the brokerage for property management?
In Kentucky, the client wants transaction accounting. Which statement is correct?
A Kentucky licensee encounters property management money is received. What should the licensee remember?
- → For the Kentucky state portion, how should a candidate analyze tenant security deposits will be collected?
- → A licensee in Iowa encounters security deposits and prepaid rents are part of the management relationship. What should the licensee remember?
- → A commercial landlord offers a new tenant a rent-free period of three months at the beginning of a five-year lease. What is this incentive commonly called?
- → A commercial tenant wants to sublease half of her leased space to another business. The original lease is silent on subleasing. Can the tenant sublease the space?
- → What is a 'triple-net lease' (NNN) in commercial real estate?
- → A retail tenant has a percentage lease with a base rent of $2,500 per month and pays 5 percent of annual gross sales over a $400,000 breakpoint. The tenant's annual gross sales are $600,000. What is the tenant's total annual rent?
- → What is a 'ground lease' in commercial real estate?
- → A commercial lease includes a 'use clause' that restricts the tenant to operating a bookstore only. The tenant wants to add a coffee bar inside the bookstore. Can the tenant do this without the landlord's consent?
- → A commercial real estate broker is explaining lease types to a prospective tenant. All of the following are characteristics of a ground lease EXCEPT.
- → A shopping center landlord negotiates an 'exclusive use clause' with a major grocery store tenant, prohibiting the landlord from leasing other spaces in the center to competing grocery stores. A convenience store tenant later opens and begins selling a significant volume of grocery items. Does this violate the exclusive use clause?
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam
Previous Question
A property manager must decide whether a new tenant's emotional support animal must be allowed in a no-pets building. Under fair-housing law, the manager should
Next Question
A retail tenant has a percentage lease with a base rent of $2,500 per month and pays 5 percent of annual gross sales over a $400,000 breakpoint. The tenant's annual gross sales are $600,000. What is the tenant's total annual rent?