Property Management

An 'escalation clause' in a commercial lease adjusts the rent based on:

AThe tenant's gross sales
BChanges in a price index (CPI) or fixed annual percentage increases✓ Correct
CThe landlord's mortgage payments
DVacancy rates in the building

Explanation

An escalation clause in a commercial lease provides for periodic rent increases based on the Consumer Price Index (CPI) or a fixed annual percentage, protecting the landlord against inflation.

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