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Escalation Clause
A commercial lease provision specifying annual rent increases tied to a fixed percentage, stepped rates, or the Consumer Price Index (CPI).
An Escalation Clause is a contractual provision within a commercial or long-term residential lease dictating how and when base rent will increase during the lease term.
Escalations may take the form of stepped annual fixed dollar increments, preset percentage increases (typically 3% to 5%), or cost-of-living adjustments pegged to the Consumer Price Index (CPI).
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