Commercial lease rent increase percentage.

[Travis Elliott]

Hi

I currently lease a commercial building out for 4900 a month. The tenants are currently selling their business to a conglomerate.  

the new buyers suggest a rent increase of $ 200 every five years.  This sounds low cinsidering that it is less than 1% a year. 

Is there an industry standard percentage that is used to calculate rent increases on commercial property.

Thanks

Travis

[Brock Mogensen]

Quote from @Travis Elliott:

Quote from @Brock Mogensen:

3% is the norm for annual rent escalators in a NNN lease. The norm was set based on the Fed's target inflation rate.

The problem is if I do 3% I am only covering inflation. My base rent would stay the same.

 Leases are always a negotiation. 3% is the norm, but certainly can shoot for higher. Or just start with a higher Yr 1 rent rate