Fair Market Rent Reset Calculator

Fair market resets mark-to-market rent. This calculator models.

Current rent

Market growth % per year

Years to reset

Reset floor % of current

Reset ceiling % of current

Bounded reset rent

$218,998

Unbounded market rent

$218,998

Bounding effect

How the math works

Unbounded = current × (1 + growth)^years. Reset = bounded between floor × current and ceiling × current.

4% market growth over 5 years = 21.7% compounded. On $180k current: unbounded $219k, but ceiling caps at $225k (125%). Floor/ceiling structure gives both sides certainty. Removing bounds exposes each to wide swings depending on market regime.

How to Use

Enter current rent.
Enter market growth % per year.
Enter years to reset.
Enter reset floor %.
Enter reset ceiling %.
Read reset rent.

Frequently Asked Questions

How determined?

Three-broker appraisal most common. Each side picks broker; brokers pick third. Each opinion submitted; average of two closest used. Formal process documented in lease. Alternative: comparable transactions; index-based (CPI + premium); baseball arbitration (either/or).

Typical bounds?

Floor: 90-95% of current rent (prevents deflation surprise). Ceiling: 110-130% of current (caps tenant exposure in hot market). Fully-floating market rent with no bounds: rare but does occur in institutional leases.

Timing?

Typical reset triggers: 5-year anniversaries, option exercise, long-term lease midpoint. Expensive process (brokers cost $5-15k each). Not worth resetting for under 500-1000 SF leases — use fixed escalators instead.