CAM means Common Area Maintenance and is often referred to operating expenses or common area expenses. In most retail and office leases, the tenants pay the landlord rent and CAM each month.
A tenant’s fair portion of CAM is determined by dividing the leasable area of the tenant’s
premises by the total leasable area of all premises at the property. This percentage is then multiplied by the total estimated or budgeted CAM for the property for the year and divided by 12 to determine the monthly amount.
CAM includes all expenses to maintain, manage and repair all of the common areas of the property. This includes expenses like real property tax, building insurance, cleaning, painting, management fees, etc. In some instances CAM may also include the cost of security at the property. CAM does exclude non-operating expenses like legal fees, accounting, business license fees and typically any capital expenses.
So when comparing CAM charges at various properties, make sure that you are comparing “apple to apples”!