Graduated Rent Calculator

Graduated rent — fixed percentage increase each year — is the standard for office, medical, and longer-duration retail leases. This calculator compounds the escalator across the term and returns total rent, straight-line average, PV, and effective CAGR.

Base rent year 1 (annual)

Annual escalation %

Lease term (years)

Discount rate

Total rent over lease

$2,751,331

Straight-line avg annual rent

$275,133

PV of rent stream

$1,900,926

Final-year rent

$313,146

Effective CAGR

3.00%

How the math works

Graduated rent increases by a percentage each year — 3% annually is typical on office and retail, sometimes indexed to CPI. Percentage escalation compounds, so year 10 at 3% is 1.30x year 1 (not 1.27x linear).

Percentage escalators mean landlord participates in inflation; fixed stair-steps lock rent growth independent of CPI. Choose intentionally — cap escalators with max/min (e.g., 2-4% collar) on long leases.

How to Use

Enter year 1 base rent and annual escalation %.
Enter lease term in years.
Enter discount rate for PV math.
Read total, average, PV, and CAGR.

Frequently Asked Questions

Fixed percentage vs CPI?

CPI escalators track inflation but can be volatile. Fixed percentages are predictable but may miss spikes. Floor/ceiling collars (e.g., 2% min / 4% max) are common risk-sharing structures.

Escalation on base rent only or CAM?

Usually base rent escalates; CAM is expense-pass-through and naturally grows with actual costs. Some leases cap CAM growth at CPI-linked rates too.

Tenant push-back?

Tenants push for 'CPI with floor/ceiling' or fixed 2-2.5% — landlords want 3%+. Long leases should have a mark-to-market step at year 5 or 10 to avoid long-term mispricing.