Which lease type is specifically designed so rent adjusts based on an external economic indicator?

• A. Escalated Lease
• B. Index Lease
• C. Reappraisal Lease
• D. Ground Lease

Answer: (B)

Rent adjustments tied to an external economic indicator come from an index lease. In this setup, the rent moves in line with a published index—typically the Consumer Price Index or another economic measure—at set intervals, so changes in inflation or the chosen indicator are reflected in the lease payments. This contrasts with an escalated lease, which uses predetermined increases regardless of current economic data; a reappraisal lease, which adjusts rent based on periodic appraisals of the property’s value; and a ground lease, which often bases rent on land value or other terms rather than an external index.