N
The sales threshold above which percentage rent becomes payable when derived mathematically from minimum rent.
A natural breakpoint is the sales threshold above which percentage rent becomes payable when the breakpoint is derived mathematically from minimum rent. A common formula is: annual minimum rent divided by the percentage rent rate equals the natural breakpoint.
If annual minimum rent is $100,000 and percentage rent is 5%, the natural breakpoint would be $2 million. The lease should always be reviewed for the actual calculation methodology and applicable adjustments.
REAL
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