Negotiate Fair Rent Escalation Provisions for Life of Lease
Ideally, commercial leases wouldn’t be subject to variables that could negatively affect both landlords’ and tenants’ profitability. In reality, inflation—which is impossible to predict with complete certainty—can affect the bottom line for both parties if it hasn’t been contemplated ahead of time and the lease doesn’t provide a way for both sides to deal with it fairly. That’s why so many landlords and tenants agree to use rent escalation to keep up with rising costs. But using rent escalation isn’t as simple as it sounds.