Is 12% occupancy cost too high for a restaurant?

Twelve percent occupancy cost is above the healthy range for most restaurants. Public chains report rent and occupancy between roughly 5% and 11% of sales. At 12%, a restaurant is carrying rent that will show up as thin margins by year three.

What does occupancy cost include?

Occupancy cost is total annual occupancy divided by annual gross sales. It includes base rent, CAM, property taxes, building insurance, and percentage rent where it applies. Utilities usually sit outside it.

How do I test whether a rent is too high?

Divide the proposed annual occupancy cost by the tenant's realistic annual sales. If the result exceeds 10%, the tenant needs higher volume than projected or a lower rent.

How Long Until a Commercial Real Estate Broker's First Commission Check?

Sep 26

Written By Retail Made

Nine to eighteen months is a common range for a new commercial broker's first commission check. It varies by market, asset class and firm, but the gap is long enough that it filters who stays in the business more than talent does.

Nobody tells you this before you sign on, which is the single most useful thing to know before you do.

Why it takes that long

Three things stack.

Deal cycles are long. A retail lease can run three to nine months from first tour to execution, and longer with buildout contingencies or a ground-up space.

You start with no pipeline. Your first deal cannot begin until you have prospects, and prospecting takes months before it produces a tour.

Payment lags the work. Commissions commonly pay at lease execution, sometimes at rent commencement, sometimes in installments. The deal closing is not the check arriving.

What that means before day one

Plan for a runway, not a bridge.

Twelve to eighteen months of living expenses in savings is the honest number. Many people start with three to six months and leave in month eight, not because they were bad at the work but because the arithmetic ran out before the first deal landed.

If the runway is not there, the practical options are a draw against future commissions where a firm offers one, a salaried support role on a team while you learn, or part-time income that does not compete for your prospecting hours.

What to measure while you wait

Track what you control, because GCI will read zero for a long time and it will tell you nothing.

Spaces walked
Owners met
Tenants toured
LOIs drafted
Proposals sent
New prospects added

Those numbers move every week from your first week. They are also the honest early predictor: the person doing the activity eventually gets paid, and the person waiting for the phone does not.

What a firm's training actually covers

Most firms teach process, not craft.

You will learn the CRM, the forms, the compliance requirements and the commission split. What to say on a tour, how to read an operator's numbers, how to judge whether a tenant can carry a rent — those are usually left to absorption, which is a polite word for figuring it out alone over several years.

The part worth knowing about your mentor

On most teams, the person training you takes a share of your deals.

That is not corrupt, it is the structure, and it is often a fair trade for the access. But it does shape what gets taught, and when. Knowing it up front is better than discovering it in month fourteen.

Career and Business Growth covers running a pipeline, setting goals you can hold, knowing your streets and your owners, and finding the part of this work you actually like. It is free.

Retail Made