Property Management

What is a 'percentage lease' commonly used in Rhode Island retail properties?

AA lease where rent is a percentage of the building's assessed value
BA lease where the tenant pays a base rent plus a percentage of their gross sales✓ Correct
CA lease with annual rent increases equal to a percentage of inflation
DA lease where the landlord receives a percentage of the property's net income

Explanation

A percentage lease requires the retail tenant to pay a base rent plus an additional percentage of their gross sales once they exceed a specified threshold (the breakpoint). It is common in shopping centers and malls.

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