1. What is Commercial Rent Review?

Commercial rent review is a process where the rent for a commercial property is adjusted, often based on the Consumer Price Index (CPI) or other agreed-upon metrics. This helps maintain the real value of rental income over time.

2. How Does the Calculator Work?

The calculator uses the standard CPI-based rent increase formula:

Where:

• \( CPI \) — Consumer Price Index (inflation rate percentage)
• \( Current Rent \) — The existing monthly rent amount

Explanation: The calculation adjusts the current rent by the inflation rate to determine the appropriate rent increase.

3. Importance of Rent Review

Details: Regular rent reviews protect landlords from inflation eroding rental income and ensure tenants pay fair market rates. The frequency is typically specified in lease agreements (often annually or every 3-5 years).

4. Using the Calculator

Tips: Enter the current CPI percentage (without % sign) and current monthly rent amount. The calculator will show both the rent increase amount and the new total rent.

5. Frequently Asked Questions (FAQ)

Q1: What CPI measure should I use?
A: Typically use the CPI measure specified in the lease agreement. Common choices include All Items CPI or specific indices like CPI-U.

Q2: Are there alternatives to CPI-based reviews?
A: Yes, some leases use fixed percentage increases, market reviews, or a combination of methods.

Q3: Can rent decreases happen with negative CPI?
A: Unless lease specifies otherwise, negative CPI could theoretically reduce rent, though many leases include floor clauses.

Q4: How often should rent reviews occur?
A: Typically every 1-5 years, as specified in the lease agreement.

Q5: Are there caps on rent increases?
A: Some jurisdictions have legal limits, and many leases include caps (e.g., maximum 5% increase regardless of CPI).