One of the most frequent surprises I see with first-time commercial tenants is the CAM bill. You negotiate your base rent, sign the lease, and then discover your total monthly cost is significantly higher than you expected. CAM charges — common area maintenance — are a normal part of commercial leasing, but understanding exactly what they cover and how to negotiate them can save you thousands over the life of your lease.
What CAM Charges Cover
CAM charges cover the shared expenses of operating and maintaining the common areas of a commercial property. These are spaces that benefit all tenants but are not part of any individual tenant's leased suite. Typical CAM expenses include:
- Parking lot maintenance — repaving, striping, pothole repair, sweeping
- Landscaping — lawn care, irrigation, tree trimming, seasonal plantings
- Exterior lighting — parking lot lights, building exterior fixtures
- Common hallways and lobbies — cleaning, HVAC for shared spaces
- Trash removal — dumpster service for the property
- Security — cameras, patrol services if applicable
- Property management fees — sometimes included as a percentage of total expenses
- Snow and storm cleanup — less common in Florida, but part of the standard CAM list nationally
How CAM Charges Are Calculated
Your CAM share is based on your proportionate square footage relative to the total leasable area of the building or complex. This is called your “pro rata share.”
Your Pro Rata Share = Your Leased SF ÷ Total Leasable SF
Most landlords estimate annual CAM expenses, divide by twelve, and bill tenants monthly along with base rent. At the end of the year, they reconcile estimated payments against actual expenses. If actual costs were higher, you owe the difference. If they were lower, you get a credit.
What Should NOT Be in Your CAM
This is where tenants need to pay close attention. Some landlords include expenses in CAM that really should not be there. Items that should typically be excluded:
- Capital improvements — a new roof, structural repairs, or building additions benefit the landlord long-term and should not be passed through as annual maintenance
- Leasing commissions and marketing — the cost of finding new tenants is the landlord's responsibility
- Landlord's income taxes — property taxes are a standard NNN expense, but the landlord's own income taxes are not
- Costs of correcting building code violations — pre-existing compliance issues belong to the owner
- Depreciation — this is an accounting entry, not an operating expense
How to Negotiate CAM Charges
CAM charges are negotiable. Here are the key protections I recommend to every tenant client:
- CAM cap. Negotiate a maximum annual increase — typically 3% to 5% — so your costs do not spike unexpectedly.
- Detailed exclusions. Spell out what cannot be included as CAM. Capital expenditures, legal fees, and management fees above a reasonable percentage should all be excluded.
- Audit rights. Your lease should give you the right to review the landlord's CAM records and dispute inaccurate charges.
- Gross-up provision. If the building is not fully occupied, the landlord should calculate CAM as if it were — otherwise you pay a disproportionate share of fixed costs.
CAM in Florida Commercial Leases
In Florida, CAM charges often include items that are less common up north — hurricane preparedness, storm drainage maintenance, and irrigation costs for landscaping in our climate. Florida properties may also have higher insurance-related pass-throughs due to the state's property insurance market. These are legitimate expenses, but you should understand exactly what they are before you sign.
The Bottom Line
CAM charges are not something to gloss over. They can represent a substantial portion of your total occupancy cost, and they are one of the most negotiable parts of a commercial lease. Know what is included, what should be excluded, and always negotiate protections before you sign. If the numbers feel unclear, that is exactly the kind of situation where having a broker in your corner pays for itself.