Percentage Lease in Real Estate

What type of property is percentage lease most commonly used with?

Retail space

A percentage lease is a type of lease agreement that is most commonly used in retail spaces, particularly in shopping malls and centers. This type of lease benefits both the landlord and the tenant as the tenant pays a base rent plus a percentage of their gross sales. This arrangement aligns the interests of both parties and encourages the tenant to generate more sales, which in turn benefits the landlord.