What type of lease arrangement involves a retail store paying base rent and a percentage of sales?

The type of lease arrangement where a retail store pays a base rent along with a percentage of sales is known as a percentage lease. This leasing structure is particularly common in retail spaces, as it aligns the interests of the landlord and tenant. The landlord receives a guaranteed base rent while also benefiting from the success of the tenant's business through the additional percentage of sales. This arrangement can incentivize landlords to support their tenants in achieving higher sales, knowing that their income will increase as the tenant's performance improves.

In contrast, a flat lease typically involves a fixed rent amount that does not vary with the tenant's income, while a triple net lease places the financial responsibilities of property expenses on the tenant, which is not a requirement in a percentage lease. Similarly, a gross lease includes all expenses in the rent, providing a different financial structure than what is seen in a percentage lease. Understanding these distinctions helps clarify how each lease type functions within the commercial real estate market.