What are CAM charges and why do they matter?
CAM charges are common area maintenance costs. They can include shared property expenses and can materially change the true cost of a space.
What it means
CAM stands for common area maintenance. It usually refers to shared property costs such as landscaping, parking lot maintenance, common utilities, repairs, janitorial service, management, and other building or center expenses.
Why it matters
CAM can change the monthly cost of a lease. It may be estimated upfront and reconciled later. If a business only looks at base rent, it may underestimate the true occupancy cost.
Common mistakes
Businesses often fail to ask what is included in CAM, whether costs are controllable, whether there are caps, and how prior-year expenses compare with current estimates.
What to validate
Ask for current CAM estimates, historical CAM expenses if available, what categories are included, how expenses are allocated, and whether any items are excluded or capped.
Questions businesses usually ask
Are CAM charges negotiable?
Some parts may be negotiable, but it depends on the property and lease structure. Caps, exclusions, audit rights, and definitions are often more important than the label.
Are CAM charges the same as rent?
They are not base rent, but they are part of the tenant's occupancy cost and should be evaluated with rent.