Common Area Maintenance (CAM) refers to the expenses a landlord incurs to operate, maintain, and repair the shared portions of a commercial property — lobbies, parking lots, landscaping, hallways, elevators, and exterior lighting. In most commercial leases these costs are "recoverable," meaning tenants reimburse the landlord for their proportionate share. CAM is a core component of net leases and a frequent source of tenant–landlord disputes when the math is not transparent.
What CAM typically includes
CAM pools vary by lease, but commonly recoverable categories include:
- Landscaping, snow removal, and parking lot maintenance
- Common-area utilities, lighting, and HVAC
- Janitorial and security for shared spaces
- Property management and administrative fees
- Repairs and maintenance of common building systems
How CAM is billed
Landlords usually bill estimated CAM monthly throughout the year, then reconcile against actual costs after year end in a process called the CAM true-up. Each tenant pays their pro-rata share — typically their rentable square footage divided by the property’s total rentable square footage — subject to any caps, exclusions, or base-year provisions in their lease.
A retail center spends $200,000 a year on recoverable CAM. A tenant occupying 5,000 of the center’s 50,000 rentable square feet has a 10% pro-rata share, so their annual CAM contribution is roughly $20,000 — billed about $1,667 per month and trued up to actuals at year end.