Real Estate Glossary

What is Cpi and Market Rent Escalation (In a Lease)?

In a lease, CPI and market rent escalation are provisions that allow the landlord to increase the rent based on changes in the cost of living or the local real estate market. CPI escalation is based on the Consumer Price Index, which is a measure of the average price of a basket of goods and services consumed by households. Market rent escalation is based on the rent being paid for comparable properties in the area. Both CPI and market rent escalation can be used to ensure that the landlord's income keeps pace with rising costs or market conditions.

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