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Ranger Rick, Other/Just Looking in 33139

What is appropriate broker commission on a commercial lease?

Asked by Ranger Rick, 33139 Tue Jun 5, 2012

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Commercial Real estate agents are typically paid a commission upon the signing of a lease. The commission is paid by the owner of the building and is typically paid one-half upon lease execution and one-half upon tenant occupancy. The commission is most often calculated as a percentage of the lease value and usually ranges between four and six percent. For example, if a tenant signs a 3-year lease for 2,000 square feet at $20 per SF per year, a 5% commission equals $6,000 (3 yrs x 2,000 SF x $20 x 5%).

To further complicate matters, the agent's Broker is the one that gets paid the commission. The Broker then pays a portion of the commission to the agent, depending on the agent's split. Commission splits range anywhere from 50/50 (most common) to 90/10 in favor of the agent. Using the above example, the agent would receive anywhere from $3,000 to $5,400.
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