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Rent Step-Up Calculator
Annual rent step-ups (typically 2-3% for office and industrial, 3-5% for multifamily) compound across the lease term and meaningfully grow lease NPV. This calculator schedules each year's rent, totals the contract value, and reports the final-year rent so landlord brokers and tenant reps can structure deals on apples-to-apples comparable basis.
Annual
Total contract rent
$1,375,666
Average annual rent
$137,567
Final year rent
$156,573
How the math works
Annual step-up clauses are the simplest escalation: starting rent compounds at a fixed percentage each year. For a 10-year lease at $120K with 3% bumps, total contract rent reaches $1.376M and the final year hits $156K.
Compare to flat CPI escalations (which floor at 0% in deflation) and stepped fixed schedules (year 1-3 at one rate, year 4-7 another).
How to Use
- Enter year 1 annual base rent.
- Enter the annual escalation percentage (typically 2-3%).
- Enter the total lease term in years.
- Read total rent, average rent, and final-year rent.
Frequently Asked Questions
How are step-ups quoted in leases?
Typically as 'rent shall increase by 3.0% per annum on each anniversary of the commencement date.' Some leases substitute the lesser of CPI or a fixed cap.
Do free rent months affect this?
No — step-ups apply to base rent only. Free rent (concessions) is reflected in net effective rent, not contract rent.
Compare 2.5% vs 3.0% over 10 years?
On $120K starting rent, 10-year 2.5% step-up totals $1.345M; at 3.0% it totals $1.376M — a $31K difference favoring the landlord with the higher escalator.
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