Natural Breakpoint

When a tenant has agreed to pay "Percentage Rent", they have typically agreed to pay a percentage of their revenues in excess of some amount, called a "breakpoint". While that breakpoint can be explicitly defined (e.g. $100,000,000), it's often referred to as a "natural" breakpoint, which can be calculated by dividing the agreed upon base rent amount by the percent of the revenue in excess of that breakpoint that will be due. For example, if a tenant's base rent is $300,000, and pays 1% of revenues in excess of a natural breakpoint, that breakpoint will be $300,000 divided by 1%, or $30,000,000. So, if that tenant's revenues for that year were $35,000,000 (i.e. $5,000,000 in excess of the natural breakpoint), a total of $50,000 in percentage rent would be due.

Within CashFlow, Percentage Rent is handled on the Rent Roll tab within a tenant's expanded view.