Which type of lease is often utilized for periods longer than three or five years?

A percentage lease is commonly used, particularly in commercial real estate scenarios such as retail establishments, where a landlord charges rent based on a percentage of the tenant's sales revenue. This type of lease aligns the interests of both parties, as the landlord benefits from the success of the tenant’s business. Percentage leases are often structured to extend for longer terms, generally exceeding three or five years, because they allow tenants to grow their businesses while providing landlords with a steady income that can increase as the tenant's sales potentially rise over time.

In contrast, other lease types mentioned typically cater to shorter durations or do not have the same profit-sharing aspect as a percentage lease. A variable lease may involve fluctuating payments, but it is not specifically tied to a sales percentage and may not necessarily extend beyond a few years. A fixed lease involves a set payment amount and is more static, usually appealing for short- or mid-term arrangements. Lastly, a month-to-month lease typically allows for flexibility and short-term occupancy, making it unsuitable for long-term arrangements.