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Updated over 3 years ago,
CPI vs Actual Inflation, how are you protecting 3-10 years leases
I have entered into a number of leases, fighting the RE Agents on a method to protect me in the case of accelerated inflation. Getting a 3% increase is hard and CPI has been manipulated to the point that it does not represent real inflation. Anyone have suggestions on how to protect my assets from inflation. I believe real inflation is closer to 10%-20% (call me crazy) On a 10-year term for our class A tenants- this means that we are receiving less than 50% purchasing power even with a 3% increase. The best way is to put in a "fair market value" renewal clause even if they want multiple renewals. At least you can present new data as opposed to being locked in. Anyone using anything different? I think we are seeing inflation suggest by Gov, at 4.2% (if we use the same method they used for CPI in 2009? you get a much higher number. (www.shadowstats.com).