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Percentage Rent Leases in Commercial Real Estate


Percentage rent is used in retail leases where the landlord has bargaining power to demand a share of the tenant's economic gains.

Demand for retail space may be high or a landlord's specific location may be particularly attractive such that the tenant is willing to pay not only a fixed amount of rent but a share of its gross revenue. These types of leases require a sophisticated understanding of the underlying economics of tenant's business. These leases also require very careful drafting.

  • How is gross revenue defined?
  • Is there a minimum amount or a maximum amount?
  • How are these numbers verified?
  • And what are all the related protections for the landlord or the tenant?

This program provides a practical guide to negotiating and drafting percentage leases.

  • Circumstances where percentage rent is commonly seen
  • Economics of percentage rent – landlord and tenant perspectives
  • Defining key terms – "gross sales," exclusions, percent of rent
  • Determining thresholds – minimum rent, sliding scales
  • Financial reporting and audit rights
  • Important related provisions – non-competition, continuous use, payment terms

DETAILS
Phone/Audio
Thursday, July 14, 2022
1:00–2:00 PM

SPEAKERS

  • Richard R. Goldberg, Ballard Spahr LLP, Philadelphia, PA
  • John S. Hollyfield, Norton Rose Fulbright LLP, Houston, TX

PRODUCED
July 14, 2022

APPROVED CREDIT
North Carolina: 1.00 MCLE Hour

PROGRAM PRICING
See pricing below.