Although the local CPI has hovered between 0-2% since the recession. In 2017 we have seen it steadily rise above 2% to a current 2.5%. This will affect the annual increase increments for new leases signed. Historically industrial escalation clauses demanded a floating increase between 3-5%, whatever the CPI at the time.
The Los Angeles MSA (LA-Riverside-OC) Consumer Price Index inched up by +0.1% in April following no change in overall prices in March. Over the past year, prices in the region have declined by -1.3%. The chief culprit was falling transportation prices which were primarily driven by plunging energy prices, down by -32.1% since April of last year. On the other hand, core CPI (less food and energy) prices increased by +1.5% during the same period. [Note: local consumer price index data are not seasonally adjusted]
The above data is used to calculate the annual rent increases on a typical lease. Many rent adjustment clauses allow for annual increases to fall within a range, such as 3-6% per annum. Right now, the annual rate of change is zero according to the above data.