Frequently Asked Questions
What is a Creative Leasing
Creative leasing refers to flexible terms between a property owner and a tenant. The property owner and a tenant agree to a fair rent based on actual store sales. Property owners have more confidence offering creative leasing with the use of the Guesst platform.
What is a Pop-up?
A Pop-up store is a short-term agreement between a property owner and a merchant. It can be an opportunity for an emerging business to try physical retail, or it can be an expansion model for existing retailers. It often spans a three month term or less during a special holiday or seasonal market. Sometimes pop-ups are an opportunity to test street retail or a mall space. Pop-ups usually include percentage rent and often extend to a longer term based on success.
What is Percentage Rent ?
Percentage rent is a component of a performanced-based lease agreement based on sales data supplied by the merchant. Guesst creative leasing software verifies the accuracy of the sales data, giving property owners increased confidence to offer flexible terms. A percentage rent agreement can refer to percentage of sales only however; it is more commonly a part of a rental agreement that includes a base rent plus percentage rent over predetermined breakpoints.
What is Base Rent?
Base rent refers to the fixed portion of the rent paid monthly. Most percentage rent terms include a base rent plus a percentage of sales over a breakpoint. Base rents and breakpoints can vary during the lease/ license agreement so property owners and merchants share in the risk and rewards of the business. The calculations are made automatically in Guesst making it easy to administer creative leasing.
What are some examples of percent rent calculations?
Percentage rent is a term used to describe a mix of fixed and variable rent that can change seasonally with changing breakpoints.
Example
Base + a % of sales over a break point
$5,000 + 10% over $50,000 in sales
If sales = $100,000
Rent = $5,000 + 10%*$50,000
Rent = $5,000 + $5,000 = $10,000
Base + a % of sales over a break point
$5,000 + 10% over $50,000 in sales
If sales = $100,000
Rent = $5,000 + 10%*$50,000
Rent = $5,000 + $5,000 = $10,000
What is a Threshold Rent or Greater of?
Threshold rent refers to the greater of a threshold rent or percentage of sales..
Example
$5,000 or 10%, whichever is greater
If sales = $75,000,
Rent = $7,500
If sales = $40,000
Rent = $5,000
$5,000 or 10%, whichever is greater
If sales = $75,000,
Rent = $7,500
If sales = $40,000
Rent = $5,000
What is a Breakpoint?
A breakpoint is the predetermined dollar amount that merchant sales must exceed before percentage rent kicks in.
What is CAM?
Common Area Maintenance refers to the fees that cover shared expenses in a building ie: electric, parking lot maintenance, basic utilities, security.
Why would a merchant want to share their sales data with their property owner?
Many lease and license agreements require sales reporting every 30 days. Guesst automates the process making it easier for merchants and property owners alike. Guesst automates this process to make it as easy as possible for merchants to report sales. Property owners use this data to better support their merchants, ie; marketing support and strategic merchandising plans.
The merchants “Set it and forget it,” saving the time and hassle to report manually. It simplifies the process for property owners by not having to collect the data manually which often comes in sporadically and in many different formats.
The merchants “Set it and forget it,” saving the time and hassle to report manually. It simplifies the process for property owners by not having to collect the data manually which often comes in sporadically and in many different formats.
