CAM charges, or Common Area Maintenance charges, are costs associated with maintaining and operating the common areas of a commercial property. CAM expenses are typically shared amongst Lessees (tenants) and are most common in retail centers, Class A medical buildings, and large industrial properties.
Common CAM expenses may include landscaping, parking lot maintenance, exterior lighting, common area utilities, janitorial services, ice removal (if applicable), loading dock maintenance, security, and repairs to shared areas. Depending on the lease, ownership may include certain administrative or property management costs.
CAM charges are generally separate from the tenant’s base rent and may be billed monthly based on an estimated amount, with an annual reconciliation based on the property's actual expenses.
Because CAM provisions vary from one lease to another, prospective Lessees should carefully review what expenses the Lessor includes, how their share is calculated, and whether the lease provides for exclusions or limits on increases.
Understanding CAM charges is an important part of evaluating the total occupancy cost of a commercial space, not simply the advertised base rent.
If you need assistance with commercial leasing as a property owner or prospective tenant, contact Dr. Nicole Jones with Jones Wadsworth Commercial Real Estate at (256) 886-7700.
