Property Management
A South Carolina commercial tenant in a 'percentage lease' pays rent based on their gross sales above a 'natural breakpoint.' The natural breakpoint is:
AA fixed amount set by the landlord
BThe sales level at which base rent equals the percentage of gross sales (Base Rent ÷ Percentage Rate)✓ Correct
CThe point at which the tenant becomes profitable
DA percentage of the national average sales for the business type
Explanation
The natural breakpoint = Base Rent ÷ Overage Percentage. For example, if base rent is $50,000 and the percentage is 5%, the natural breakpoint is $1,000,000. Above that, the tenant pays 5% of sales.
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