Which lease structure adjusts rental rates based on the amount of business conducted by the tenant?

The appropriate lease structure that adjusts rental rates based on the amount of business conducted by the tenant is the percentage lease. In this arrangement, a tenant pays a base rent along with a percentage of their gross sales, which provides the landlord with a direct benefit from the tenant’s success. This type of lease aligns the interests of both the landlord and the tenant, as the landlord can earn more when the tenant's business performs well, while the tenant can enjoy lower fixed costs if sales are low.

This structure is commonly used in retail settings where sales can vary significantly, allowing for flexibility. The fixed lease, in contrast, involves a steady and unchanging rental rate, regardless of business performance, meaning it does not adapt to the tenant's sales. A variable scale lease may imply some room for adjustment, but it typically does not specifically link rent to sales performance in the same way a percentage lease does. Similarly, a triple-net lease involves the tenant paying for additional costs (like property taxes, insurance, and maintenance) but does not tie rental rates to the tenant's sales activities.