dgonzo99 said:
Evidently you have never had experience with how these deals work. That is pretty much a standard deal especially in the retail world. Not goofy at all. This about the same percentage that malls get from the stores along with the rent.
You said that it is common to get a similar percentage "along with rent." From what I have seen, there is no base rent. We will see when we get a copy of the lease, but is it standard to have no base payment or minimum rent?
The first 5 years free bit is another part of the agreement that I suspect is not exactly standard.
Edit: Looks like only the first two years are free. From 6.3.1 of
the agreement.
Year 3 - 2%
Year 4 - 4%
Year 5 - 6%
"In no event shall the Percentage Rent due for any Lease Year (beginning in Lease Year 4) be less than the
average of the Percentage Rent payable during the two (2) Lease Years immediately preceding such Lease Year (the 'Minimum Rent'). Notwithstanding this statement, if in Lease Year 8 the Percentage Rent has been more than the Minimum Rent for the prior two (2) Lease Years, than the Minimum Rent obligation is removed for the duration of the Term."
Brian Alg
Brazos Coalition for Responsible Government and Moderator Restraint