Percentage Lease Explained How Do Landlords Share in Retail Revenue
Release Date: 08/05/2026
Alberta Real Estate Tutor
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info_outlinePercentage Lease Explained: How Do Landlords Share in Retail Revenue?
Enroll in courses here: https://www.albertarealestateschool.com/shop/
or call our Success Team at : 587-936-7779
What is a percentage lease in commercial real estate?
A percentage lease is commonly used in retail properties, shopping centres, and plazas. Under this type of lease, the tenant typically pays:
✔️ Base Rent
✔️ Operating Costs (where applicable)
✔️ Additional Percentage Rent once sales exceed a specified breakpoint
Here’s the basic idea: Shopping centres and plazas often invest in marketing and promotions that drive customer traffic to retailers. For example, a large mall marketing campaign can attract more shoppers, helping retailers increase sales. Because the landlord contributes to creating that business traffic, the lease may allow the landlord to receive a percentage of the tenant’s revenue above a certain sales threshold (breakpoint).
For example, a tenant might pay base rent plus an additional 2%–3% of sales above the agreed breakpoint. That additional amount is paid to the landlord, which is why it’s called a percentage lease. Understanding commercial lease structures is key for commercial real estate education and exam preparation.
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