What is Percentage Rent?
Additional rent paid by retail tenants based on a percentage of gross sales exceeding a defined breakpoint, common in retail leases.
Definition
Percentage rent is additional rent paid by retail tenants calculated as a percentage of their gross sales exceeding a defined breakpoint (natural or artificial). The breakpoint is the sales threshold above which the percentage rent obligation kicks in. Percentage rent is distinct from CAM charges but interacts with CAM reconciliation in retail properties because both require accurate tracking of tenant-specific financial data. Some leases offset percentage rent against CAM charges or include percentage rent calculations in the overall tenant billing reconciliation. Property controllers must ensure their billing systems handle percentage rent and CAM as separate but coordinated billing streams.
Related Resources
Validate Your CAM Reconciliations
CapVeri catches gross-up errors, cap violations, and billing mistakes before tenants or auditors find them — from your Yardi or MRI exports.
Start Free Audit