Common Area Maintenance (CAM) is a critical concept in the real estate investment industry, particularly in the realm of commercial real estate.
In a commercial lease, CAM charges are costs that are passed on to the tenant by the landlord for the maintenance and upkeep of common areas that are shared among the tenants and users of the building. These areas typically include hallways, elevators, lobbies, restrooms, parking lots, shared conference rooms, and any other publicly accessible area in a building or complex.
The exact items that can be charged as part of CAM can vary, but they usually involve costs associated with cleaning, security, landscaping, utilities, property taxes, property insurance, repairs, and sometimes administrative costs. The specifics are typically laid out in the lease agreement.
CAM charges are generally divided among the tenants based on the proportion of the total building space they occupy. For example, if a tenant rents 25% of the total square footage of the building, they would typically be responsible for paying 25% of the total CAM costs.
CAM charges are a key factor in the total cost of a lease, and they need to be considered carefully during lease negotiation and comparison.