Percentage Rent - Percentage Lease
Percentage rent is rent paid by a tenant to a commercial landlord under a percentage rent lease. These leases are almost always limited to retail stores. In most of these leases the percentage rent is a percentage of the gross sales above a defined amount referred to as the breakpoint. Many landlords and tenants prefer percentage leases because such leases allow both parties to prosper when sales are strong while keeping the base rent at a level what both parties can accept when sales are not strong. See: Glossary of Commercial Tenant Leasing Terms and Assignment of Lease or Sublease.