Common Area Maintenance (CAM) is the cost associated with maintaining the common areas of a commercial property. This can include everything from landscaping and snow removal to security and utilities. CAM charges are typically paid by the tenant in addition to their base rent.
The amount of CAM charges can vary greatly depending on the size and amenities of the commercial space available. For example, a small office building with minimal common areas may only have a few hundred dollars in monthly CAM charges. In comparison, a large shopping mall with multiple restaurants and retailers could have several thousand dollars in monthly CAM charges.
How Does CAM Work?
CAM charges are generally calculated as a percentage of the property's total square footage. The percentage can vary depending on the type of property but is typically between 1-5%. For example, if a commercial office building has 100,000 square feet of space and the CAM charges are 2%, the monthly CAM charges would be $2,000.
Who Pays CAM Charges?
CAM charges are typically paid by the tenant in addition to their base rent. The lease agreement will specify who is responsible for paying CAM charges. In some cases, the landlord may cover some or all of the CAM charges.
Why Are CAM Charges Important?
CAM charges are important because they help to cover the costs of maintaining the common areas of a commercial property. By distributing these costs among tenants, the overall cost of renting space in a commercial property becomes affordable.
CAM charges can also be used to improve property. For example, if the CAM charges are increased, the landlord may use that money to make upgrades to the common areas, such as adding new landscaping or improving the security system.
What Are Some Tips for Negotiating CAM Charges?
If you are a tenant, you may be able to negotiate your CAM charges with the landlord. Here are some tips to keep in mind:
Know what the average CAM charges are for similar properties in the area. This will give you a good starting point for negotiating your own CAM charges.
Try to get the landlord to agree to a flat monthly rate instead of a percentage of the property's square footage. This can help to keep your monthly CAM charges more predictable.
Ask the landlord to cover some or all of the CAM charges. This is especially common in larger commercial properties where the tenants are responsible for a significant portion of the overall CAM charges.
Get everything in writing. Make sure that your lease agreement clearly states who is responsible for paying CAM charges and how those charges will be calculated. This will prevent misunderstandings down the road.
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If you want to know more about what CAM is, contact the team at Milbrook Properties today. We can guide you with all the information you need to make informed decisions.