Office Leasing strategies during times of high inflation. It appears that we are into a period of inflation which in February was measured at 7.9% (annual rate) and is projected to go higher. I do not think it will be surprising to see it exceed 10% annual rate by the end of the year. This can dramatically effect your office rental rates, especially if there are CPI (Consumer Price Index) increases in your lease. The problem is once the rental rates go up they generally do not have a clause to go back down as inflation rate eases. Other considerations that affect rent rates including supply and demand are ignored if not careful. It would not be out of line to try to renegotiate the increases to something less than the CPI rate.

We at the 524 Building generally just use a fixed percentage increase and many other landlords do as well. The problem for both the tenant and the landlord is during a period of... (more)