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In a perfect commercial real estate world, shopping center and retail leases wouldn’t be subject to variables that could negatively affect your profitability. In reality, inflation—which is impossible to predict with complete certainty—can affect your bottom line unless you and the tenant agree to use “rent escalation” to keep up with the market. This isn’t as simple as it sounds, though. There are several methods that can be used to do this, and pros and cons for each.
