If you are looking to lease a commercial property, then you must get a good grasp of CAM fees. With that in mind, in today’s post, we explain what CAM fees are and why they matter.
What Are CAM Fees?
The term “CAM” stands for “Common Area Maintenance.”
As the name implies, CAM fees (also known as CAM charges or simply CAMs) are maintenance expenses paid by tenants to landlords above base rent.
The costs included as CAM expenses will vary depending on the specific lease. Some of the most common include:
- Sidewalk/parking lot maintenance
- Snow removal
CAM expenses are usually calculated on a pro-rata basis. In other words, the space occupied by the tenant is divided by the total square footage, then each tenant pays their share accordingly.
CAM Fees and NNN Leases
NNN leases or triple net leases, are a type of lease where the tenant agrees to pay rent plus other three expenses:; Property taxes, insurance premiums, and maintenance costs (CAM).
Triple net leases are some of the most common in commercial real estate. However, you can come across other types of leases, for example:
- Single net leases (N leases): in addition to rent, the tenant also pays their share of property taxes.
- Double net leases (NN leases): the tenant pays rent plus their share of property taxes and insurance.
- Absolute net leases: Here the tenant pays all the expenses of a triple net lease plus the expenses necessary to maintain the expenses of the property, such as major repairs.
The expenses that the tenant is expected to pay should be clearly specified in the lease contract.
If you are looking to lease a commercial space, it’s extremely important to have a CRE by your side in order to obtain the most convenient terms possible, including a fair CAM structure.
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