Commercial Rent Escalation Cap Calculator

Project next year's commercial rent in seconds. Enter the current annual base rent, the CPI change specified in your lease, and the contractual escalation cap. Optionally add a floor if your lease guarantees a minimum bump. The calculator returns the applied percentage, new annual rent, monthly delta, and any deferred inflation you may need to true up later.

Total base rent for the current lease year before escalation is applied.
Published CPI increase that your escalation clause references.
Maximum annual increase allowed under the lease.
Defaults to 0%. Enter the guaranteed minimum increase if your lease includes a floor.

Results assume CPI changes apply once per lease year with no retroactive adjustments. Review lease language for compounding, look-back, or catch-up provisions before finalizing budgets.

Examples

  • $360,000 rent, 5.6% CPI, 3% cap, floor blank ⇒ Applied escalation: 3.00% (from CPI 5.60%) • New annual rent: $370,800.00 USD • Annual increase: $10,800.00 USD • Monthly delta: $900.00 USD • Deferred CPI beyond cap: 2.60%.
  • $475,000 rent, 1.2% CPI, 4% cap, 2% floor ⇒ Applied escalation: 2.00% (from CPI 1.20%) • New annual rent: $484,500.00 USD • Annual increase: $9,500.00 USD • Monthly delta: $791.67 USD • Floor added 0.80% above measured CPI.

FAQ

Can I include operating expense pass-throughs?

Use this tool for base rent only. Layer expense stop reconciliations or CAM true-ups separately since they follow different escalators.

How should I model multi-year catch-up provisions?

Run separate scenarios with the deferred CPI percentage added back into a future year so you can see the blended impact when a catch-up clause triggers.

What if CPI is negative?

Input the negative CPI figure and add your lease floor if one exists. The calculator will clamp the decrease at the floor so rent never drops below the contractual minimum.

Does this cover mid-year rent changes?

No. Convert partial-year rent to an annualized figure first or divide the results by 12 to map increases to specific months in your rent roll.

Additional Information

  • Escalations are calculated on annual base rent and exclude pass-throughs or percentage rent clauses.
  • Deferred CPI beyond the cap highlights inflation you may try to recapture in a future gross-up or renewal negotiation.
  • Monthly delta divides the annual increase by 12 to simplify cash-flow forecasting for treasury and AP teams.
  • Entering a floor ensures the output reflects leases that guarantee minimum bumps even when inflation cools.

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