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The natural breakpoint is calculated dividing the minimum rent by the percentage (overage) rent rate. Either the same or a different percentage rent rate is applied to gross sales over the breakpoint to arrive at percentage (overage) rent due.
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retailtrafficmag.com/mag/retail_lease_language_critical...
retailtrafficmag.com/mag/retail_lease_language_critical/
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“The best days for percentage rent structures may be past,” says the report. “Currently, mall owners wrestle with stores over how to deal with returns of web-purchased merchandise. Over time, it may become easier to charge rents based strictly on square footage.”...
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retailtrafficmag.com/mag/retail_hot_topic_long/
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Raise the breakpoint. There's no rule that the threshold for percentage rent to kick in must be the natural breakpoint. Instead of the $833,333 benchmark in the earlier example, the landlord may agree to start percentage rent when profits exceed $1 million, or even $1.5 million.
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memphis.bizjournals.com/memphis/stories/2006/09/11/focu...
memphis.bizjournals.com/memphis/stories/2006/09/11/focus7.html
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Thus, to deter- mine a natural breakpoint, one mere- ly divides the fixed rent amount by the applicable percentage. Percentage rent provisions can also ...
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www.linowes-law.com/portalresource/lookup/wosid/content...
www.linowes-law.com/portalresource/lookup/wosid/contentpilot-core-6-2422/media.pdf
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Use of an “artificial” breakpoint can change the result. With the artificial breakpoint method, fixed-minimum rent and percentage rent can be set independently. For instance, a landlord might agree to reduce fixed-minimum rent if a tenant agrees to increase percentage-rent with a higher artificial breakpoint. ...
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www.hklaw.com/id24660/PublicationId2202/ReturnId31/cont...
www.hklaw.com/id24660/PublicationId2202/ReturnId31/contentid49398/
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For instance, if the fixed rent is $140,000 per year, and the percentage for percentage rent purposes is seven percent, then the natural breakpoint would be $2,000,000. The underlying rationale of a ... Use of a natural breakpoint would result in the same percentage rent as the traditional method described above.
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www.hklaw.com/id24660/publicationid3/returnid33/content...
www.hklaw.com/id24660/publicationid3/returnid33/contentid45703/
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Key Phrase page for natural breakpoint: Books containing the phrase natural breakpoint ... 10,000 7,500- c v cg 5,0007 2,500+, minimum rent ($5,000 ~- - Natural breakpoint. ~ 7% of sales ($71,428) _ $5,000 25 50 75 100 125 150 Sales Percentage Rent ... "
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www.amazon.com/phrase/natural-breakpoint
www.amazon.com/phrase/natural-breakpoint
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When this is done, the landlord must be careful to negotiate how partial lease years, and lease years which contain an abatement of minimum rent will be treated for purposes of computing percentage rent, since such lease years may require a proration of the breakpoint in order to be fair to the landlord.
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www.leasingprofessional.com/lease-agreement-strategy/37...
www.leasingprofessional.com/lease-agreement-strategy/370-tenant-strategies-for-percentage-rent-clauses.htm
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The natural sales breakpoint is determined by dividing the tenant's percentage rate into its annual rent. The resulting number is the natural breakpoint and the tenant pays percentage rent on all sales above the natural breakpoint.
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www.entrepreneur.com/tradejournals/article/204427430.ht...
www.entrepreneur.com/tradejournals/article/204427430.html
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