Calculate annual rent increases and total lease liability for commercial real estate.
Compound (Annual % on current rent)
Fixed (Annual % on base rent only)
Lease Summary
Total Rent Over Term:$0.00
Final Year Annual Rent:$0.00
Average Monthly Rent:$0.00
Year
Annual Rent
Monthly Rent
Total for Year
Understanding Commercial Lease Escalations
In commercial real estate, a lease escalation clause is a provision that allows the landlord to increase the rent periodically. This is designed to protect the landlord against inflation and rising operating costs. For tenants, calculating these increases is critical for long-term budgeting and determining the Total Occupancy Cost (TOC).
Fixed Percentage Escalations vs. CPI
Most modern commercial leases use a Fixed Percentage Escalation, typically ranging from 2% to 4% annually. Our calculator handles two types of fixed increases:
Compound Escalation: The percentage increase is applied to the previous year's rent. This is the most common structure in office and retail leases.
Simple/Fixed Escalation: The percentage increase is always based on the initial year one rent, leading to slightly lower costs over time.
Real-World Example
Imagine you sign a 5-year lease for a boutique office space with a starting annual rent of $50,000 and a 3% annual compound escalation.
Year 1: $50,000
Year 2: $51,500 ($50,000 + 3%)
Year 3: $53,045 ($51,500 + 3%)
By the end of the term, your total commitment is not simply $250,000 (50k x 5), but actually $265,457 due to the compounding effect. Using a commercial lease escalation calculator helps you avoid underestimating your financial obligations.
function calculateLease() {
var baseRent = parseFloat(document.getElementById('baseRent').value);
var rate = parseFloat(document.getElementById('escRate').value) / 100;
var years = parseInt(document.getElementById('leaseYears') ? document.getElementById('leaseYears').value : document.getElementById('leaseTerm').value);
var type = document.getElementById('escType').value;
if (isNaN(baseRent) || isNaN(rate) || isNaN(years) || years <= 0) {
alert("Please enter valid numbers for all fields.");
return;
}
var tableBody = document.getElementById('leaseTableBody');
tableBody.innerHTML = '';
var totalLeaseValue = 0;
var currentAnnualRent = baseRent;
var resultsHtml = '';
for (var i = 1; i 1) {
if (type === 'compound') {
currentAnnualRent = currentAnnualRent * (1 + rate);
} else {
currentAnnualRent = baseRent + (baseRent * rate * (i – 1));
}
}
var monthlyRent = currentAnnualRent / 12;
totalLeaseValue += currentAnnualRent;
resultsHtml += '