Which type of lease requires the tenant to pay a portion of their sales in addition to base rent?

A percentage rent lease is specifically designed to allow landlords to receive additional income based on the tenant's sales performance. In this type of arrangement, the tenant pays a base rent plus a percentage of their revenue, which aligns the interests of both the landlord and the tenant. As the tenant's business performs better and sales increase, the landlord benefits from a corresponding increase in rent, creating a mutually beneficial relationship.

This type of lease is particularly common in retail environments, where the success of the business can be closely linked to location and foot traffic. By structuring the lease in this way, landlords can attract tenants, knowing that as their business thrives, so does their rental income.

In contrast, a gross lease typically encompasses all expenses within the base rent amount, meaning the tenant wouldn't pay a percentage of sales. A net lease generally shifts some of the property expenses to the tenant but does not involve a sales percentage. A triple net lease also transfers significant obligations to the tenant but remains focused on operational costs rather than tying rent to sales performance.