Percentage rent breakpoint calculator
Derive the natural breakpoint from base rent and rate, override it with a negotiated figure, and compute what is owed at the annual true-up.
Percentage rent
Illustrative only. Check the lease for exclusions from gross sales and the reporting period the breakpoint applies to.
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When percentage rent actually gets paid
Most retail tenants never cross their breakpoint, which is by design — the breakpoint is usually set so that percentage rent is upside rather than baseline. A tenant paying percentage rent every year is a tenant whose base rent was probably set too low.
Because it is upside, percentage rent is easy to under-collect. It depends on sales reports arriving on time and someone remembering to compute the true-up. That combination is exactly why it goes uncollected in spreadsheet-run portfolios.
Questions
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