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Q: Rent Increases in Commercial Leases ( No Answer,   1 Comment )
Question  
Subject: Rent Increases in Commercial Leases
Category: Business and Money > Small Businesses
Asked by: andrewgibbons-ga
List Price: $40.00
Posted: 20 Apr 2006 14:29 PDT
Expires: 28 Apr 2006 04:54 PDT
Question ID: 721081
Is there a standard rental escalation percentage that includes all of
the potential increases a landlord might face to be passed on to
sublesees?  We are starting a new business in Manhattan, and our own
lease tells us that aside from the rental increase of 3% per year, we
are subject to the following:  insurance escalations, Fuel, electric,
gas escalations, tax escalations, etc.  Having not lived in the space
yet, we are unsure how much any of these increases can be.  We would
like to hold our sub-lessees to these same increases, but would rather
make it a nice round figure that they can agree to, rather than each
year have to recalculate our their rent increase with more paperwork
and calculations.
Is there some standard percentage that takes all of these escalations
into account?  How should we proceed?
Answer  
There is no answer at this time.

Comments  
Subject: Re: Rent Increases in Commercial Leases
From: frde-ga on 21 Apr 2006 02:44 PDT
 
Some years ago, in the UK, I advised someone to pin lease rental to the RPI 
(Retail Price Index) + a percentage.

It has worked pretty well for quite some time.

I don't follow the electricity increases, surely you will be using
your own meter, 'gas' as in 'petrol' for cars - that is strange.

I would have anticipated you signing a lease that consisted of two parts :-
  Basic Lease
  Service Charge

Perhaps a little more detail ?

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