Lease Terms - Renewal


#1

We are in the process of negotiating a renewal. In your book, you mention 3 options for adjusting income, including a percentage of the gross revenue. Our lease has a fixed base rent with no inflation adjuster, but provides 50% of advertising revenues above $300K (annually). Advertising revenues do not include commissions paid to 3rd parties or separate charges paid by an advertiser to reimburse the sign company for costs to create the advertiser’s message. Just wanted to get second opinion on these terms. Thanks in advance!


#2

My opinion, is Economy 101. Something is only worth what someone will pay for it. If this lease is worth that to you, then that’s what you should pay for it. If it’s not worth it, then it’s time to back out. Simple.