Property Management

A NJ commercial property manager is negotiating a percentage lease for a retail tenant. A percentage lease typically requires the tenant to pay:

AA flat monthly rent only
BBase rent plus a percentage of the tenant's gross sales above a breakpoint✓ Correct
COnly a percentage of net profits
DRent based only on square footage regardless of sales

Explanation

A percentage lease—common in retail and shopping centers—requires base rent plus a percentage of the tenant's gross sales once a natural breakpoint (base rent ÷ percentage rate) is exceeded.

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