One of the first questions landlords ask when listing their industrial or warehouse property is: "How do I pay you?" The answer is straightforward — you pay a percentage of the total rent consideration once a tenant is secured.
What Is Rent Consideration?
Rent consideration is the total rent due over the lease term. Here's a simple example:
If the previously agreed commission rate in the listing agreement is 6%, the total commission would be $36,000 ($600,000 × 6%).
How the Commission Is Split
That $36,000 is typically divided equally between the broker representing the landlord and the broker representing the tenant — $18,000 to each side.
This split structure matters. Setting the commission rate too low can discourage tenant brokers from presenting your property to their clients. A competitive fee keeps your listing at the top of their consideration list.
What a Good Broker Does for That Fee
In addition to negotiating on your behalf, your broker should market your property across every major platform available in Southern California — including AIR CRE, CoStar, and LoopNet Premium. A comprehensive marketing campaign also includes direct mailers, cold calling, email blasts, broker networking meetings, signage, 3D Matterport virtual tours, and social media promotion.
Frequently Asked Questions
Who pays the leasing commission — the landlord or the tenant?
In most commercial leases, the landlord pays the commission, which is then split between the landlord's broker and the tenant's broker.
How is rent consideration calculated?
Multiply the monthly rent by the total number of months in the lease term. That figure is the base the commission percentage is applied to.
Does the commission rate affect how actively a property gets marketed?
Yes. A competitive commission rate incentivizes tenant-representative brokers to actively present your property to their clients, since it directly affects their own compensation.
Are commission rates negotiable?
Yes, rates are typically negotiated between the landlord and the listing broker before the property is marketed, and they can vary based on property type, market conditions, and lease term.
Thinking About Leasing Your Industrial Property?
Ron Mgrublian is a commercial real estate broker specializing in industrial and warehouse properties throughout Southern California, from Los Angeles to the Inland Empire. Contact Ron directly at 562-354-2537 or rmgrublian@leelalb.com to discuss leasing your property.
Ron Mgrublian
Principal, Lee & Associates Los Angeles – Long Beach
562-354-2537
rmgrublian@leelalb.com
CalDRE# 01902882
We specialize in industrial real estate from the greater Los Angeles to the Inland Empire markets, including: Long Beach, Carson, Torrance, Gardena, Compton, Rancho Dominguez, Wilmington, Paramount, Santa Fe Springs, Huntington Beach, Garden Grove, Irwindale, Signal Hill, Pomona, City of Industry, and Ontario, serving surrounding submarkets including LA South Bay, LA Central, Mid-Counties, San Gabriel Valley, Orange County and the Inland Empire.
