What type of lease includes a percentage of sales along with basic fees and net costs?

A percentage lease is a contractual agreement where the rent is based on a percentage of the tenant's sales revenue, alongside any base rent and a share of additional costs. This type of lease is commonly employed in retail environments, particularly in shopping centers, where landlords benefit from the success of their tenants.

The structure of a percentage lease allows property owners to maintain a steady income stream that can scale with the tenant's business performance, ensuring that the rent reflects actual traffic and sales, which can be particularly advantageous in retail settings. By tying the rent to sales, landlords can incentivize tenants to maximize their business performance, thereby fostering a mutually beneficial relationship.

Other lease types differ in nature and structure. A fixed lease involves a set rental amount without variation based on sales, while a ground lease typically pertains to the leasing of land itself for a long-term period, rather than incorporating sales figures. A triple net lease places the financial responsibility for property expenses—such as taxes, insurance, and maintenance—primarily on the tenant, rather than linking rent to sales performance. Each of these alternatives serves distinct purposes and circumstances within real estate leasing, making the percentage lease particularly valuable in scenarios where business performance is closely tied to rental income.