CAM explained
Don't sign blind.
CAM is the commercial-lease term for the tenant's share of operating expenses for shared building areas. Uncapped CAM can quietly raise total occupancy cost. Caps, audit rights, and exclusions are negotiable.
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What it usually means
CAM stands for Common Area Maintenance. In a commercial lease, the tenant pays a pro-rata share of building operating expenses (cleaning, landscaping, repairs, sometimes management fees and capital improvements). CAM is paid on top of base rent in NNN and modified-gross structures.
Why it matters before signing
An uncapped CAM with broad inclusions can push effective rent meaningfully above the base. Annual caps in the 4-7% range are common; what counts as CAM and what is excluded (capital improvements, management fees, marketing) decides actual cost.
What to ask before signing
- Is there an annual cap on CAM increases? At what rate?
- What is included in CAM, and what is excluded (e.g., capital improvements, marketing, management fees)?
- Do I have audit rights to review the landlord's CAM calculation?
How Dang catches it
Dang's commercial-lease engine flags uncapped CAM as HIGH severity. Audit-rights presence is captured in the finding context.
Frequently asked questions
What is NNN?
Triple net: tenant pays base rent plus property taxes, insurance, and CAM. Total occupancy cost is meaningfully higher than base rent.
What's a reasonable CAM cap?
4-7% annual increase cap is common. Some leases cap controllable expenses (e.g., cleaning) but not uncontrollables (taxes, insurance).
What is CAM reconciliation?
An annual true-up where the landlord reconciles estimated CAM payments to actual expenses. Tenant pays the gap or receives a credit.
Sources & further reading
- U.S. Small Business Administration · commercial real-estate basics
No account required · File deleted after analysis · Not legal advice. Dang reports contract findings in plain English. For consequential decisions, consult a licensed attorney in your state.