Typical Commission Breakdown:
– Office Space: Commissions usually fall between 4% and 6% of the total lease value over the initial term.
– Retail Space: Often commands higher rates of 5% to 6% due to the increased complexity of these transactions.
– Industrial Space: Generally slightly lower, ranging from 4% to 5%.
– Government Leases: For State of Michigan leases (often affecting Detroit and Lansing), commissions are capped at 5% and can only be applied to the first five years of the base rent.
– Standard Payment Terms
– Responsibility: The landlord typically pays the entire commission fee.
– Split: The total commission is usually split 50/50 between the landlord’s listing broker and the tenant’s representative broker (e.g., 3% to each if the total is 6%).
– Timing: Payment is typically split into two equal installments: 50% at lease execution (signing) and the remaining 50% when the tenant occupies the space or begins paying rent