“Proper management of CAM charges leads to more consistent and predictable cash flow, plus improved operating efficiency and a better relationship with tenants,” he said. 

Find out more about CAM charges, plus how your lease structure influences them and how to explain CAM charge details to your renters. 

What are common area maintenance charges?

Common area maintenance (CAM) fees are charges tenants pay for work on shared spaces of commercial properties. CAM costs vary by asset class, lease type and location, and often include:

• Lobby lighting, electricity and utilities
• Water for irrigation
• Landscaping
• Administrative fees
• Parking lot, sidewalk and driveway maintenance
• Janitorial services

CAM and lease structures

How property managers handle CAM fees depends on the lease structure, which may include:

• Gross leases include all common area maintenance costs within a single, fixed rent payment and are the standard for multifamily and other residential leases.
• Double net leases have the occupant paying some, but not all, operating expenses, including a portion of CAM fees. These types of leases are typically used for long-term commercial tenants that significantly customize their spaces.
• Triple net leases require tenants pay a separate share of operating expenses, including CAM, on top of their base rent. These are common for office, retail and industrial properties.

How to calculate CAM

The pro rata share, or the percentage of square footage tenants occupy in the building, generally determines the portion of overall CAM expenses tenants pay.

For example, if total CAM costs for a retail center are $250,000 annually and a renter leases 15% of the space, their monthly CAM charge would be $3,125.

CAM fluctuations

In many commercial leases, property managers estimate expected CAM expenses as part of the building's annual budget at the beginning of each year, then bill occupants monthly based on those estimates.

“Landlords typically take into account historical data and inflation as well as estimates from contractors and service providers to forecast CAM expenses,” Bade said. “Property management software can help landlords forecast expenses as well.”

CAM costs can fluctuate annually and throughout the year based on actual operating expenses. For example, severe weather events may impact landscaping costs, as can market trends and unforeseen repairs. At year-end, property managers reconcile the forecast with actual costs and either bill tenants for overages or provide credits for overpayments.

CAM tips for property managers

To ensure CAM charges are accurate and help tenants understand their obligations, property managers should focus on:

• Transparency and communication: Provide tenants with detailed annual statements showing CAM costs by category, plus supporting documents that verify charges. Communicate CAM changes proactively—especially increases. If CAM fees rise significantly, explain the specific factors driving costs, such as rising utility rates.
• Preventive maintenance: Regularly inspect shared areas to keep them in good working order and avoid costly repairs. Inspections should cover major systems—such as HVAC and roofing—plus smaller details, such as lighting, flooring and signage.

The bottom line: CAM fees are essential for managing shared spaces in commercial properties, with costs and payment structures varying by lease type. Property managers can rely on proactive management and clear communication to keep CAM fees fair and predictable.