What type of lease is most common for retail spaces within malls?

The type of lease most commonly used for retail spaces within malls is the percentage lease. This kind of lease arrangement is particularly favorable in retail environments because it allows the landlord to collect a base rent along with a percentage of the tenant's sales revenue. This structure aligns the interests of both the landlord and tenant—the landlord benefits directly from the tenant's success, providing an incentive for the landlord to support the tenant's business through effective marketing and management of the mall's environment.

In malls, where foot traffic can significantly impact sales, percentage leases are appealing as they can adapt to the business performance of retailers. This arrangement often works well for businesses that can vary greatly in sales volume, providing them with a more manageable rental expense during slower periods while ensuring the landlord benefits from the success of popular or high-performing stores.

Other lease types may not align as well with the business model typical in mall settings. For example, a gross lease includes all expenses in a fixed rent and might not allow for the flexibility that retailers desire. A net lease places more responsibilities on the tenant regarding property taxes and maintenance costs, which can be burdensome for businesses that thrive on variable costs. Lastly, ground leases pertain to leasing land rather than building space, making them unsuitable for most retail