CAM Charges (Common Area Maintenance)

Common area maintenance (CAM) charges are a tenant’s proportional share of the cost to maintain a property’s shared spaces: parking lots, lobbies, landscaping, common-area utilities, security, and management. A retail center with 40,000 square feet of total leasable space and $200,000 in annual CAM costs would bill a tenant occupying 4,000 square feet — a 10% pro-rata share — $20,000 a year in CAM, on top of base rent. CAM is usually estimated and billed monthly, then reconciled annually against actual costs.

For a borrower, CAM recovery is a quiet but real driver of NOI durability. Most retail and many office leases cap annual CAM increases — often around 5% — which means a landlord facing faster-rising insurance or utility costs can end up absorbing the gap above the cap rather than passing it through. Lenders and appraisers underwriting a refinance will look past the pro forma CAM budget to the actual CAM recovery history: a property that bills $200,000 in CAM but only collects $170,000 because of caps, vacancy, or gross-up disputes has real NOI leakage that a rent roll alone won’t show. Borrowers refinancing a retail or office asset should have their CAM recovery percentage ready before a lender asks for it.

We don’t track individual CAM schedules, but recovery health is exactly the kind of caveat that surfaces in a retail or office lender’s observed appetite notes when reimbursements are running behind what’s billed.