It is common for commercial property values to increase significantly over time. Commercial real estate investments have historically performed well, proving to be one of the greatest hedges against inflation of all investment types. One of the reasons for this is that a well-structured lease provides for rents to increase with/ or above inflation (“rent escalations”). Commercial real estate’s value is derived by the capitalization of those rents net of expenses. If net rent increases, it’s highly likely that the value of the investment increases accordingly – it’s that simple.