How should I think about lease escalations during periods of inflation?

Lease escalations help preserve purchasing power and support long-term property performance. During periods of inflation, owners should carefully evaluate escalation structures that balance market competitiveness with protecting future income.

Well-designed escalation provisions recognize that operating costs, insurance, taxes, maintenance, and replacement expenses rarely remain constant over the life of a lease.

Long-term leases should anticipate long-term economic realities.