Ryan, Other/Just Looking in Hgin

What are standard commerical lease broker commissions? We have a small office building in SF. The broker

Asked by Ryan, Hgin Thu Oct 18, 2007

wants $1.00 sq/ft per year. A 2 year lease for 5000 sq ft would be $10000 in commission. My agent and the broker are asking for over 9% of the total lease. Am I getting ripped of?

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I don't know if there is a standard commercial lease broker commission is S.F. But I do know that the percentage of commission goes up with lower total lease price.

9% for around $120,000 lease is within range.

Sylvia
1 vote Thank Flag Link Thu Oct 18, 2007
Sylvia Barry,…, Real Estate Pro in Novato, CA
MVP'08
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Dollar a foot seems a bit low, but there may be many variables that contribure to this pricing, I assume it is a NNN lease? Anyway, to answer your question, 9% is steep, good thing it is all negotiable. One note, 2yr lease on 5000ft is too short, but office space is not exactly hot right now. dividing the space would yield a better $/ft spread.
0 votes Thank Flag Link Fri Oct 31, 2008
Ryan, I think it takes as much expertise and time to negotiate a two year lease as it does to negotiate a five year or even a ten year lease. It takes as much time and expertise to negotiate a small class "C" office building as it does a class "A" office.

You are not getting ripped off on the commission at $1 per square foot per year..

I did the math though. you stated the the commissions are 9% of the total lease for a 5,000 square foot office building?! If so, the annual rent is about $55,000 or $11.00 per square foot per year or 90 cents per foot per month. That sounds extremely low for a class "C" office building in San Francisco. If I was the tenant at that rent I would want to give my agent a bonus and a thank you gift!

If I was the landlord, I'd ask for an explanation of why the rent was so low.
0 votes Thank Flag Link Sat Oct 20, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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