An Ideal Hedge Against Inflation

This article in Forbes provides a great summary of the case for using Commercial Real Estate as a hedge against inflation.

All the leases we do provide for bump ups in rent over time and renewals at market rates. On occasion we have linked bump ups in rent to the Consumer Price Index (CPI) to ensure a closely correlated hedge against inflation. If rising interest rates lead to cap rate expansion, as is often the case, values can be sustained and still continue to grow over time through increased rental rates. Properties on main streets in downtown Toronto are a perfect example of the Scarcity condition identified as point #3 in the article linked above.