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Updated over 3 years ago,

User Stats

183
Posts
108
Votes
Chris Blackburn
Pro Member
  • Developer
  • Salem, OR
108
Votes |
183
Posts

CPI vs Actual Inflation, how are you protecting 3-10 years leases

Chris Blackburn
Pro Member
  • Developer
  • Salem, OR
Posted

    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).

  • Chris Blackburn
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