How does a percentage lease typically benefit landlords?

A percentage lease typically benefits landlords because it allows their income to rise in tandem with the sales of their tenants. This type of lease commonly includes a base rent plus a percentage of the tenant's sales revenue, enabling landlords to share in the financial success of their tenants. As the business performs better and generates higher sales, the landlord's income increases accordingly. This alignment of interests can incentivize landlords to support and promote their tenants' success, creating a more dynamic and profitable rental arrangement.

While fixed rental income can provide stability, it does not necessarily capitalize on the potential growth of tenant sales. Limiting tenant business hours or requiring lower initial rents may have distinct advantages but do not directly contribute to increasing the landlord's profit based on tenant performance, which is the primary focus of a percentage lease.