Commission Calucations
How are commission calculated on the lease transaction?
One of the questions I often get asked is how are commissions calculated on a commercial lease transaction? The short answer is we add up all the rents over the agreed term(length of contract) and apply the commission to it. Here is an example to help you understand.
Scenario:
The lease rate is agreed at $15/sqft not including operating costs. The space is 2,000 sqft and the lease term is a 5 year lease. The Landlord has agreed to pay a 5% commission.
$15/psf x 2,000 sf x 5 years
= $150,000
The commission would be 5% of $150,000
*It is important to know that additional rent or operating costs are excluded from the calculations of commission.
The content of this article is meant for informational purposes only. It is not meant to provide any financial, business, commercial, or legal advice. Readers are encouraged to discuss all matters with a commercial realtor or lawyer for all particular situations involving the content of this article.
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