Glossary

Percentage-Only Lease

Also known as: Percentage-rent-only lease

A retail lease structure with no fixed minimum (base) rent, under which the tenant's entire rent obligation is calculated as a percentage of gross sales from dollar one or above a very low threshold.

Percentage-only structures shift essentially all sales-volume risk to the landlord and are correspondingly rare, generally reserved for temporary or seasonal tenants, specialty kiosk and cart operators, or highly speculative new-concept tenants where a landlord prioritizes occupancy and merchandising variety over guaranteed income. Because there is no natural breakpoint calculation possible without a base rent figure, percentage-only leases instead specify a flat percentage rate directly against total gross sales, and landlords typically compensate for the added income volatility by requiring more frequent (often weekly or monthly) sales reporting, security deposits sized to a multiple of anticipated rent, and shorter lease terms than a conventional minimum-rent structure would carry.