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Profit sharing, with landlords
<i>A greater number of retailers opt into 'percentage rent' agreements, paying more when the cash register is full </i>
From the December issue: Some Manhattan landlords are looking to get into the profit-sharing business. While the practice is not widespread in New York, so-called percentage rent is on the rise here, some brokers said.
Percentage renting “is definitely growing in New York City,” said Patrick Breslin, president of retail at Grubb & Ellis.
The pay structure — in which the landlord takes a base rent plus an additional amount if the retailer achieves a certain sales threshold, or “breakpoint” — has long been used in malls, brokers said.
About five years ago, percentage rents started appearing in Manhattan leases.
These days, brokers noted that they’re now seeing a slight uptick in these types of deals. [more]