A commonly held theory in the commercial real estate industry has been that inflation can be expected to increase both the value of an asset and the value of the leases related to that asset.  

But what happens when rent increases and the cash flows don't keep up with inflation?

One answer is that If we see inflation stick around this year, and it is indeed "nontransitory," the "real return" on an asset will erode over time if the landlord cannot factor appropriate escalation clauses into their rental rate agreements. 

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