My tenant will get an increase 3/1/12 based on the CPI. How do you calculate the increase?

Tenant gets yearly increase of 3% or CPI, which ever is greater. If current rent is 300,000 and CPI is greated than 3%, how do I calculate CPI to get the increase?
In Leasing Property - Asked by GITTEL B. - Sep 15, 2011
Report Abuse
Answer this Question


Phil E.
Londonderry, NH

If I understand your question correctly to calculate the increase based on the 3% you multiply 300,000 times 1.03 = 309,000. CPI is currently at 0.3% ( so based off that it would be 300,000 times 1.003 = 300,900.

Sep 15, 2011
Report Abuse
Michal B.
Miami Beach, FL

(Current year CPI (average CPI-W & CPI-U) less last year CPI) divided by last year CPI multiplied by 100 will give you the per cent increase. (1+this % increase) times previous year rent will give you the new rent amount.
For example CPI-U for August 2011 is 226.545 and for August 2010 is 218.312
(226.545 - 218.312)= 8.233/ 218.312=0.0377*100= 3.77%
1.0377 is the multiplier of your previous year's rent amount to derive the new rent

Sep 15, 2011
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question