CAM stands for Common Area Maintenance. In commercial real estate, CAM charges are the tenant’s share of the costs a landlord incurs to operate and maintain the parts of a property that all tenants use: parking lots, sidewalks, landscaping, exterior lighting, snow removal, shared utilities and general upkeep of the building’s common areas.
What do CAM charges typically cover?
- Parking lot maintenance, sweeping, striping and snow/ice removal
- Landscaping, irrigation and seasonal grounds care
- Exterior and common-area lighting, signage electricity
- Trash removal, pest control and common-area cleaning
- Property management and administrative costs related to shared areas
How is my share of CAM calculated?
Most retail and office leases use a pro-rata share: your leased square footage divided by the property’s total rentable square footage. If you lease 2,000 sq ft in a 20,000 sq ft center, your share is 10% of eligible common-area costs. Leases usually state estimated monthly CAM payments, then the landlord performs an annual reconciliation comparing estimates with actual costs – you receive either a credit or a balance due.
CAM and triple net (NNN) leases
CAM is one of the three “nets” in a triple net lease, alongside property taxes and building insurance. For a deeper look at how NNN leases work, see our guide on why triple net leases are popular among commercial real estate investors.
Managing CAM day to day at a retail property – budgeting, vendor costs and tenant communication – is a broader topic; see our operational guide to common area maintenance in shopping centers.
Questions tenants should ask before signing
- Which cost categories are included in CAM, and which are excluded?
- Is there a cap on annual CAM increases?
- Are capital expenditures (roof, parking lot resurfacing) passed through or amortized?
- How and when is the annual reconciliation documented?
How MarQi Co. handles CAM
As an owner-operator, MarQi Co. manages common areas at its own retail centers in Wisconsin and Illinois and documents shared costs through its commercial property management and accounting services. Tenants and prospective tenants can review current opportunities on our space for lease page or ask CAM questions through our FAQ and contact pages.
What CAM covers at MarQi Co. retail centres
At the four multi-tenant retail centres MarQi Co. manages - Pewaukee Plaza in Pewaukee, National Avenue Center in West Allis, Bay View Retail Center in Milwaukee and Wansford Retail Plaza in Rockford - common area maintenance covers the parts of the property that no single tenant controls: the parking lot and its lighting, walkways, landscaping, signage and shared utilities.
In Wisconsin and northern Illinois, snow and ice removal is one of the largest and most variable common area maintenance line items, because the cost depends on how many events a winter brings rather than on a fixed schedule. That is why the way a lease defines CAM, caps it and reconciles it at year end matters more in this climate than it does in milder markets, and why tenants at these centres see the reconciliation explained rather than simply billed.
CAM Charges: Frequently Asked Questions
Are CAM charges negotiable?
Often, yes. Tenants commonly negotiate annual caps on CAM increases, exclusions for structural or capital costs, and how large expenses are amortized. The lease language controls, so review the CAM clause before signing.
Are property taxes and insurance part of CAM?
In a triple net (NNN) lease they are separate pass-throughs: CAM covers common-area operating costs, while taxes and building insurance are billed as their own "nets".
How often are CAM charges reconciled?
Most landlords bill estimated CAM monthly and reconcile once a year against actual costs. After reconciliation you receive either a credit or an invoice for the difference.
Who pays CAM in a gross lease?
In a full-service or gross lease the landlord absorbs common-area costs, and the base rent is set higher to reflect that. CAM as a separate charge appears mainly in net leases.
What is TICAM and how is it different from CAM?
TICAM stands for Taxes, Insurance, and Common Area Maintenance - the three operating costs a tenant reimburses to the landlord on a net lease. It is a broader bucket than CAM alone: CAM covers the upkeep of shared areas such as the parking lot, landscaping and lighting, while TICAM adds the property's real estate taxes and building insurance on top of that. A lease that passes through all three is effectively a triple net (NNN) arrangement, so the terms TICAM and NNN often describe the same pass-through cost structure.
What is CAM in a rental property?
In any leased commercial property - retail centre, office or industrial - CAM (common area maintenance) is the tenant's share of the cost of running the parts of the building that everyone uses rather than any single tenant. That typically includes parking lot upkeep, snow and ice removal, exterior lighting, landscaping, shared utilities and management of those areas. How the share is calculated and reconciled is set out in the lease; it is one of the most commonly underestimated occupancy costs a tenant takes on.
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