Glossary of Useful Retail Leasing Terms

In the following section, we have defined some of the most commonly used terms in the real estate industry, as referenced in the previous sections of this leasing tool kit. Read on to familiarize yourself with these terms as you progress through your leasing journey.

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Natural Breakpoint
The point at which gross sales exceed the annual base rent divided by a TBD percentage that the tenant agrees to pay in percentage rent. Example: If the base rent is $60,000 and the TBD percentage is 6.0 percent, the natural breakpoint would be $1,000,000.
Net Charges or Nets
Net charges are included in leases where the tenant is required to pay a portion, or all, of the taxes, fees, and maintenance costs for a property.

A single net lease requires the tenant to pay only the property taxes in addition to rent.

With a double net lease, the tenant pays rent plus the property taxes as well as insurance premiums.

A triple net lease requires the tenant to pay rent plus all three additional expenses.
Non-binding
Having no legal or binding force. A non-binding contract will almost always include language that reads “this contract is non-binding.” For example, a Letter of Intent is most typically a non-binding contract.