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Leasing Commission Calculator
Commercial leasing commissions follow several standard structures: flat per sqft, 5-7% of annual rent, escalating % over a multi-year term, or split new/renewal. This calculator sizes each structure so landlords and brokers can compare apples-to-apples.
Total commission
$30,868
Commission as % of total rent
4.15%
Total lease value
$743,279
Year-1 rent
$140,000
Commission spread per year
$6,174
How the math works
5,000 sqft × $28/sqft = $140K year-1 rent. 5-year term with 3% escalation = $743K total rent. Escalating commission (6/5/4/3/3): $30,800 total = 4.14% of total rent. Flat $3/sqft = $15,000 = 2%. Flat 5%: $37,150.
Compare structures: escalating is usually the middle ground and most common. Flat per sqft is simplest and used in secondary markets. Flat % is cleanest for landlords but can overpay brokers on long terms.
How to Use
- Enter tenant sqft, base rent per sqft, and lease term years.
- Pick commission structure: flat per sqft, % of annual rent, or escalating %.
- Add renewal commission if applicable.
- See total commission, per-year amount, and % of total lease value.
Frequently Asked Questions
What's typical commercial leasing commission?
Retail/office: 4-6% of total lease value (year 1: 6%, year 2: 5%, year 3: 4%... escalating down). Industrial: 4-5% flat of year 1 rent × term years. Multifamily: flat 3-5% of year-1 rent or 0.5-1 month of rent.
Who pays the commission?
Landlord in 95%+ of commercial leases. Tenant rep works for the tenant but is paid from a commission funded by landlord via the listing agreement. Tenants paying their own rep fee is rare.
How does escalating % work?
Higher % on year 1 rent to compensate broker for deal sourcing effort; declining % on later years since deal is already done. Example: 6% year 1 + 5% year 2 + 4% year 3 + 3% year 4 + 3% year 5 = avg 4.2% of total rent.
Renewal commission?
Typical 2-3% of renewal year-1 rent or a flat fee ($500-$2,500). Some leases specify 'no commission on renewal' — the landlord saves, but the original broker may push the tenant to another building for a fresh commission. Consider bundling a renewal fee to preserve alignment.
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