Do you typically include escalations when you calculate the effective rent?

Some include escalations, and others do not. I'm an appraiser in search of what most people do.
In General Area - Asked by Silver T. - Jan 28, 2015
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Answer(s)

Robert S.
Broker/Agent
Fort Stockton, TX

Yes we do try to at least keep up with base inflation.

Jan 29, 2015
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Laura C.
Broker/Agent
Orlando, FL

In my area, escalations are the norm so it would have an affect of the value of rent.

Jan 29, 2015
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J. David F.
Broker/Agent
Brentwood, TN

Always.

Jan 31, 2015
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Michael Haim S.
Broker/Agent
Encino, CA

We do in Los Angeles

Feb 3, 2015
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Francis L.
Broker/Agent
Santa Clarita, CA

Effective Rent would include ALL costs and ALL credits. Any credits from the Landlord, as well as any costs to the Tenant.

Feb 21, 2015
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Francis L.
Broker/Agent
Santa Clarita, CA

This is a follow-up to my previous answer to your question...
Effective Rent uses all of these variables to be accurately calculated:
Base Rent
Sales Tax if applicable
Real Estate Taxes
Operating Expenses
CAM
Parking Expenses
Other
Other
Tenant Paid TI
Moving Expenses
Existing Lease Buy-Out (Tenant Paid)
Minus any of the following:
Rent Concessions
Real Estate Tax Stop
CAM Cap
TI Allowance from the Owner
Existing Lease Buy-Out Allowance
Other
Other
EQUAL Pre-Tax Occupancy Cost for Year One of the Lease, starting at time period zero
This would be done for all years of the lease, showing adjustments for any costs that change, such as Rent Escalations and whatever provisions that are in the Lease Agreement that would change.
I hope that this helped!
Francis Lennarz, RE/MAX of Valencia, Commercial
lennarzrealestate@gmail.com

Feb 25, 2015
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