BREAKING: BoC Holds Interest Rate For Second Time In A Row

Lease Escalation

Learn about lease escalation in Canadian real estate — what it is, why it matters, and how it impacts landlords and tenants.

Lease Escalation

August 08, 2025


What is Lease Escalation?

Lease escalation refers to contractual increases in rent during the term of a lease, often tied to inflation or operating costs.

Why Lease Escalation Matters in Real Estate

In Canadian real estate, lease escalation clauses protect landlords against rising costs and provide predictable revenue growth.



Key points:
  • May be based on fixed amounts, CPI, or expense pass-throughs
  • Common in long-term commercial leases
  • Tenants must plan for increasing rental expenses



Understanding lease escalation helps landlords and tenants budget effectively.

Example of Lease Escalation in Action

The lease included an escalation clause increasing rent by 2% annually.

Key Takeaways

  • Specifies rent increases during lease term
  • Can be fixed or tied to inflation or costs
  • Provides revenue growth for landlords
  • Must be clearly defined in lease agreements
  • Important for tenant budgeting

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

More For You

GTA Home Sales, Prices Expected To Hold Steady In 2026: TRREB

GTA Home Sales, Prices Expected To Hold Steady In 2026: TRREB

Shutterstock

After years of volatility, the GTA housing market is entering a holding pattern.

That’s the takeaway from the Toronto Regional Real Estate Board’s 2026 Market Outlook and Year in Review, which forecasts relatively stable home sales and prices this year, as improved buyer choice and affordability continue to be weighed down by cautious consumer sentiment.

Keep ReadingShow less

Should You Buy A Toronto Condo Right Now? Experts Weigh In

Should You Buy A Toronto Condo Right Now? Experts Weigh In

Parviz Foto

Anyone who’s spent time browsing condo listings in the Greater Toronto Area (GTA) will tell you: there is currently no shortage of options. Not only that, prices have dropped to the point that they make home ownership more of a tempting reality than it once was.

Six months ago, we questioned whether it was a good time to purchase a condo in the GTA, and asked the region’s experts to weigh in. The verdict then? It could be a good time for first-time homebuyers and end-users, thanks to record-high inventory and stagnant prices. Meanwhile, however, real estate investors struggled with negative cash-flow and a near absence of sales, leaving many wanting to sell.

Keep ReadingShow less

Home Relocation Project Brings 17 Affordable Rentals To Sunshine Coast's shíshálh Nation

Home Relocation Project Brings 17 Affordable Rentals To Sunshine Coast's shíshálh Nation

Renewal Development

Via Renewal Development and Wesgroup, 17 affordable rental homes are now in the hands of the shíshálh Nation — marking the completion of a project that addresses the community’s housing needs while creating local opportunities.

Like many communities across British Columbia, the shíshálh Nation has been facing a housing crisis. This project tackles that issue head-on while supporting local economic development: roughly 70% of its construction work was carried out by shíshálh Nation entrepreneurs, providing jobs and skills training within the community.

Keep ReadingShow less

Build Canada Homes Pulls From Public, Private Sectors For Exec Team

Build Canada Homes Pulls From Public, Private Sectors For Exec Team

Valesa Faria (left) and Jeffery Coles (right) have joined the Build Canada Homes executive leadership team.

The economy may be acclimating to tariffs and interest rate pain has eased (for now), but Canadian housing remains sorely in crisis. Against that backdrop, Build Canada Homes (BCH) has its work cut out for it, and the agency is forging ahead with the appointments of Valesa Faria and Jeffery Coles to its executive leadership team.

While Faria will be stepping into the Senior Vice President of Partnership and Development role later this month, Coles assumed the Senior Vice President of Investments post in January.

Keep ReadingShow less

Hudson's Bay Left Behind 15 Million Sq. Ft Of Space. What Happens To It Now?

Hudson's Bay Left Behind 15 Million Sq. Ft Of Space. What Happens To It Now?

The closed Hudson’s Bay store in the Metrpolis at Metrotown shopping centre in Burnaby, BC. (Howard Chai)

We’re closing in on almost a year since the Hudson’s Bay Company (HBC) filed for creditor protection. Liquidating the company’s assets and closing all of its stores was the easy part — and has mostly been completed already. The hard part is determining what to do with the huge blocks of vacant space left in the company’s wake.

Across Canada, HBC operated a total of 96 stores, including not just the traditional Hudson’s Bay stores, but also a handful of stores under the Saks Fifth Avenue and Saks OFF 5TH brands.

Keep ReadingShow less

Confident In Office, Europro JV Buys 7.8-Acre Yonge Corporate Centre From Cadillac Fairview

Confident In Office, Europro JV Buys 7.8-Acre Yonge Corporate Centre From Cadillac Fairview

The Yonge Corporate Centre at 4100–4150 Yonge Street in Toronto. (Europro)

After first listing the Yonge Corporate Centre three years ago, pulling the listing, then re-listing the property this time last year, Toronto-based Cadillac Fairview has finally completed a sale of the sprawling office property.

In late January, Toronto-based commercial property management company Europro announced that they had partnered with Arista, Fieldgate Commercial, and Paradise Commercial to acquire the Yonge Corporate Centre, but did not disclose details about the transaction or ownership split.

Keep ReadingShow less

Hullmark Buys Spadina Road Retail Property For $21.7M

Hullmark Buys Spadina Road Retail Property For $21.7M

(Hullmark)

Toronto-based developer Hullmark recently acquired the retail complex at 446 Spadina Road in the Forest Hill Village neighbourhood, continuing to add to its portfolio of assets.

The property consists of two levels of retail space with one floor of office space above, and the mixed-use building is fully leased, with tenants including Forest Hill Spa, Forest Hill Pets, a Starbucks, and others.

Keep ReadingShow less

Bank Of Canada Holds Interest Rate Steady In First 2026 Announcement

Bank Of Canada Holds Interest Rate Steady In First 2026 Announcement

Bank of Canada/X

On Wednesday, the Bank of Canada held its policy rate at 2.25%, following a series of cuts in 2025 that brought the benchmark overnight rate to its current level.

Leading up to the announcement, many major Canadian banks — including RBC, TD, and CIBC — came into 2026 expecting the Bank to maintain a steady policy stance.

Keep ReadingShow less
BREAKING: BoC Holds Interest Rate For Second Time In A Row
Privacy PolicyAbout UsTerms of UseAdvertise with UsJobsContact UsRSS Feed
2025 © STOREYS Publishing Inc. | All Rights Reserved