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Percentage Rent Calculator
Retail leases (especially mall in-line and lifestyle center stores) typically charge a base rent plus percentage rent — a percentage of sales above a defined breakpoint. The natural breakpoint equals base rent divided by the percentage rate, so percentage rent only kicks in after the tenant's sales fully cover the base. This calculator computes the overage, total billable rent, and occupancy cost ratio.
Total rent (base + %)
$144,000
Breakpoint
$1,400,000
Sales over breakpoint
$1,000,000
Percentage rent
$60,000
Occupancy cost % of sales
6.00%
How the math works
Retail leases often use percentage rent: base rent plus a percentage of sales above a breakpoint. Natural breakpoint = base rent ÷ percentage rate, so the tenant pays no overage rent until sales productivity covers the base.
Healthy occupancy cost (rent ÷ sales) is typically 6-10% for soft goods, 10-15% for restaurants. Above 15%, rent burden becomes unsustainable.
How to Use
- Enter tenant's annual gross sales and base rent.
- Enter the percentage rate (typically 4-8% for general merchandise; up to 12% for jewelry/services).
- Choose natural or custom breakpoint.
- Read total rent, percentage rent, and occupancy cost ratio.
Frequently Asked Questions
What's a natural breakpoint?
Base rent divided by percentage rate. At a $84K base and 6% rate, the natural breakpoint is $1.4M sales — tenant pays 6% of every dollar above that.
Healthy occupancy cost ratios?
Soft goods 6-10%, restaurants 10-15%, jewelry 12-18%, services 8-15%. Anchor tenants negotiate well below — often 1-3%.
Is percentage rent reported monthly?
Often yes for mall tenants — sales certificates filed monthly with quarterly true-ups. Anchor tenants get annual reporting.
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