PF FOR COMMERCIAL LEASES

How Much Should a Broker’s Professional Fee Be for Commercial Leases?

This is a question that has puzzled many real estate brokers for years: What’s the standard professional fee (PF) for commercial or office leases?

We all seem to agree on the industry benchmarks for other types of transactions. For property sales, brokers typically earn between 3% to 5% of the selling price. For residential leases, the standard is one month’s rent for the first year, and half a month (or a pro-rated portion) for each succeeding year.

But when it comes to commercial leases, things aren’t so clear-cut.

I’ve been asked this question countless times. And for the longest time, my answer has always been: There’s no industry standard—it all depends on what the broker can negotiate with the property owner.

Some brokers try to follow the commission structures used by major commercial brokerages. But in practice, owners often push these numbers down, arguing that independent brokers don't provide the same level of service as larger firms.

After 10 years in the industry, I finally came across a clear, structured answer—straight from one of the country’s largest office lessors. This company, a well-respected leader in commercial leasing, offers the following commission rates to all licensed brokers who successfully lease out their properties:

1 to 2 years = 1.0 month’s rent

2 to 4 years = 1.5 months’ rent

4 to 6 years = 2.0 months’ rent

6 to 9 years = 2.5 months’ rent

9 to 10 years = 3.0 months’ rent

10 years and above = 4.0 months’ rent

While I won’t name the company to avoid stepping on any toes, I can say with confidence that it’s one of the most respected players in the industry.

This is a fair, transparent, and scalable structure—one that rewards brokers for securing longer-term leases. I believe it's time we adopt this as a standard model for our industry. Let’s lead the way in setting clearer expectations and elevating professional practices in commercial leasing.