CAM stands for common area maintenance. CAM charges are the shared costs of running the parts of a commercial property that all tenants use, such as parking lots, landscaping, lighting, and hallways. In most NNN and many modified gross leases, the landlord pays these costs and then bills each tenant for its share.
What CAM Usually Covers
Parking lot repairs, sealing, striping, and sweeping
Landscaping and irrigation
Exterior and common area lighting
Common area cleaning, trash removal, and pest control
Security and fire and life safety systems
Repairs to shared walkways, signage, and lobbies
Property management and administrative fees
Property taxes and insurance are often billed alongside CAM. In Florida, insurance can be one of the largest items, especially after an active hurricane season pushes premiums up.
What CAM Usually Excludes
Major capital costs, such as a new roof or full parking lot replacement, unless spread over their useful life
Repairs to another tenant’s space
Leasing commissions and marketing for vacant space
The landlord’s mortgage payments and income taxes
Costs caused by the landlord’s negligence
How CAM Is Split Among Tenants
Each tenant usually pays a pro rata share, which is its rentable square feet divided by the total rentable area of the property.
Pro rata share = Tenant’s square feet ÷ Building’s total square feet
Here is an illustrative example for a 20,000 square foot Sarasota retail center with $160,000 in yearly CAM costs, or $8.00 per square foot.
Tenant | Square feet | Share | Yearly CAM |
|---|---|---|---|
Restaurant | 6,000 | 30% | $48,000 |
Medical office | 5,000 | 25% | $40,000 |
Retail shop | 4,000 | 20% | $32,000 |
Salon | 3,000 | 15% | $24,000 |
Vacant suite | 2,000 | 10% | $16,000 (landlord) |
Where CAM Dollars Go
This chart shows how the example center’s $160,000 in CAM costs might break down.
Cost | Yearly amount | Chart |
|---|---|---|
Landscaping and irrigation | $36,000 | █████████ |
Parking lot and exterior repairs | $32,000 | ████████ |
Management and admin | $28,000 | ███████ |
Utilities and lighting | $24,000 | ██████ |
Cleaning, trash, and pest control | $24,000 | ██████ |
Security and fire systems | $16,000 | ████ |
How CAM Reconciliation Works
Tenants usually pay estimated CAM each month along with rent. After the year ends, the landlord compares the estimates with actual costs and sends a reconciliation. If actual costs were higher, the tenant pays the difference. If they were lower, the tenant gets a credit or refund.
Tips for Tenants and Landlords
Tenants: ask for the last two or three years of CAM history before signing
Tenants: negotiate a cap on increases in controllable costs and the right to audit
Landlords: keep clean records and send reconciliations on time
Landlords: define CAM clearly in the lease to avoid disputes
Both: agree on how vacant space is handled, since landlords usually absorb its share
Frequently Asked Questions
What is a normal CAM charge in Sarasota?
It varies widely by property type, age, and amenities. A simple industrial building may have low CAM, while a busy retail center with large parking lots and landscaping will cost more. Always ask for actual figures for the property you are considering.
Can a landlord make a profit on CAM?
CAM is meant to recover costs, not create profit. Many leases do allow an administrative fee, often a small percentage of total CAM, to cover the cost of managing the shared areas. The lease should spell it out.
Do CAM charges affect property value?
Yes. When tenants reimburse CAM, the landlord’s net operating income is steadier and more predictable, which buyers reward with a stronger price.
If you own a multi-tenant property and want CAM handled correctly, get landlord representation or call Eric Barnes at 941-207-9707.
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About the author: Eric Barnes
Eric Barnes | Commercial Advisor | 941-207-9707
Michael Saunders & Company | MSC Commercial | Sarasota, Florida
Florida License SL3600406 | GRI | RSPS
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