REoptimizer® Blog

What You Need to Know About Commercial Rent Escalations

Posted by Don Catalano on Jul 16, 2018 8:31:00 AM


Many commercial leases include some type of rent escalation clause, which allows the landlord to increase the rate of your rent either on a specific timeline or in response to a specific trigger. There are a number of types of rent escalation clauses used in commercial real estate lease agreements.

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Topics: Rent Escalation

Understanding Rent Escalation Clauses

Posted by Don Catalano on Jan 1, 2017 4:22:48 PM

Rent escalation clauses are standard parts of most commercial real estate leases. If your company rents space, your rents are probably set up to go up automatically over time. While escalations of a percent or two (or three or four) per year might not necessarily seem like a big deal, they can actually have a large impact on your occupancy cost over the period of time that many leases span.

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Topics: Rent Escalation

Planning for An Upcoming Base Year Escalation

Posted by Don Catalano on Oct 19, 2016 8:59:01 AM

Just because you have a full service or gross lease does not necessarily mean that you are shielded from exposure to an escalation for operating expenses. Many owners protect themselves by adding base year provisions to their leases and by raising the reimbursement portion of the full service lease when expenses exceed those in the base year.

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Topics: Rent Escalation

Managing Rent Escalations

Posted by Don Catalano on Mar 13, 2014 8:39:00 AM


For many tenants, a rent escalation is a yearly occurrence. They can come in two basic types -- fixed and variable -- although they can also come into play when your lease comes up for renewal. While some tenants are able to avoid them, they are usually an unavoidable cost of occupying real estate and need to be managed and planned for. Their terms can vary from lease to lease, so it's best to carefully abstract your lease so that you can predict both what will happen and when.

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Topics: Rent Escalation, commercial real estate

Be A Resourceful Tenant: Use Indices to Evaluate Rent Escalation

Posted by Michael Sweeney on Jul 19, 2013 9:06:00 AM

With the exception of short-term commercial leases, nearly all other lease agreements contain a rent escalation clause. The concept is similar to the technique used in a lease for a “freestanding” commercial space occupied by a single tenant. The provision ensures that landlords receive a fixed return on the space as well as reimbursement for a number of capital costs and expense items, including insurance, taxes, maintenance and operations.

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Topics: Rent Escalation

The Tenant's Guide to Critical Lease Clauses, Part 3

Posted by Jordan Slater on Aug 13, 2012 2:25:00 PM

Check out Part 1 & Part 2 in case you missed them.

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Topics: Occupancy Cost, Lease Clauses, Rent Escalation