All terms
CAM (Common Area Maintenance)
Shared operating expenses for a commercial property that are passed through to tenants based on their pro-rata share of the building.
Definition
Common Area Maintenance (CAM) charges cover the shared operating expenses of a commercial property that benefit all tenants. In small bay industrial properties, these typically include landscaping, parking lot maintenance, exterior lighting, common area utilities, property management fees, and shared building insurance. Tenants pay their proportional share based on the square footage they occupy relative to the total leasable area.
Formula
Tenant CAM Share = (Tenant SF / Total Building SF) × Total CAM ExpensesExample
If a tenant occupies 2,500 SF in a 50,000 SF building and annual CAM expenses are $100,000, they pay (2,500 / 50,000) × $100,000 = $5,000 per year, or about $2.00/SF.