Sales Breakpoint Rent Calculator

Percentage rent kicks in above a breakpoint. This calculator shows natural vs artificial breakpoints and overage payable.

Base rent (annual)

Percentage rent rate

Artificial breakpoint (0 = none)

Actual sales

Overage rent

$30,000

Natural breakpoint

$2,400,000

Breakpoint used

$2,400,000

How the math works

Natural BP = base rent ÷ rate. Overage = (sales − BP used) × rate. Artificial BP overrides natural.

LL should generally require natural breakpoint unless tenant has documented ramp needs. A 20% higher artificial BP is a tenant gift in steady-state years.

How to Use

Enter base rent.
Enter percentage rent %.
Enter artificial breakpoint (if any).
Enter actual sales.
Read natural breakpoint and overage.

Frequently Asked Questions

Natural breakpoint?

Base rent ÷ percentage rent %. Sales above this generate overage rent. Example: $120k base rent / 5% = $2.4M natural breakpoint.

Artificial breakpoint?

A negotiated threshold higher than natural. Common in new stores (gives tenant ramp). Creates a no-overage zone; analyze whether it benefits LL or tenant.

Which is better?

Natural breakpoint favors LL (lower threshold = more overage). Artificial favors tenant in soft years. Hybrid models use artificial for first 2 years then natural.

What documentation matters here?

Written leases, move-in/move-out inspections with photographs, ledger entries showing every payment and charge, served notices with proof of service, and contemporaneous emails or texts. Courts weigh written evidence heavily; informal understandings rarely stand. Institutional operators run a monthly file audit to catch gaps before they matter. Good paper trails recover most of what's owed.