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Understanding Common Area Maintenance (CAM)

⏳ 1 min read

Break down what CAM fees actually cover and how to negotiate them in your commercial lease.

What are CAM Fees?

Common Area Maintenance (CAM) charges cover the cost of maintaining shared spaces in a commercial property (like a retail strip center or office park).

These fees are distributed proportionally based on the square footage each tenant occupies. If you rent 2,000 sq ft in a 10,000 sq ft plaza, you are responsible for 20% of the plaza's total CAM costs (your pro-rata share).

Typical CAM Inclusions

- Parking lot sweeping, repaving, and snow removal.

- Landscaping, irrigation, and exterior lighting.

- Security patrols and shared alarm monitoring.

- Janitorial services for common lobbies, elevators, and bathrooms.

- Water, trash, and sewer utilities for shared spaces.

Negotiating CAM Caps

Tenants should aggressively negotiate a 'CAM Cap'. This is a contractual limit on how much CAM fees can increase year-over-year (typically capped at 3% to 5%).

Without a cap, an aggressive landlord could decide to completely redesign the landscaping and repave the entire parking lot, passing a massive, unexpected bill to the tenants.

Frequently Asked Questions

Q: What does Pro-Rata share mean?

Pro-rata share is the percentage of the building you occupy. It determines your portion of the CAM fees. If you occupy 10% of the building, you pay 10% of the total maintenance bill.

Q: Are property management fees included in CAM?

Yes, landlords typically include the fee they pay to the property management company (often 3% to 5% of gross rents) within the CAM charges passed to tenants.

Q: What is a CAM Cap?

A CAM cap limits the annual percentage increase of maintenance fees passed to the tenant. It protects tenants from sudden, massive spikes in operating expenses.