CAM charges (common area maintenance)

Definition

The landlord's pass-through of shared-space costs on top of base rent.

Why It Matters

In a triple-net or modified-gross lease, base rent is the start of the occupancy bill, not the end: common area maintenance, property taxes, and building insurance ride on top, usually estimated monthly and trued up in an annual reconciliation. Underwrite the whole occupancy cost, not the rent line, and read the seller's reconciliation history in diligence, because a landlord's catch-up bill for a prior year arrives on the new owner's watch. Check whether controllable CAM carries a cap and what the escalator has actually run.

In numbers: A 2,000-square-foot unit at $24 per foot base carries another $7 per foot in CAM, taxes, and insurance: true occupancy is $62,000 a year, not $48,000, and a 4% annual escalator on the CAM half compounds quietly.