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A Primer on Common Area Maintenance (CAM)

Common Area Maintenance charges (CAM) are building operating costs that may or may not be included in the base rent. This is not to be confused with the building's common area factor (view here) , which relates to the physical space that a tenant occupies.

Commercial, office and industrial rental rates in New Jersey's Monmouth and Ocean Counties are quoted in a myriad of ways. The challenge is to learn, and sometimes ferret out, what additional charges are in addition to the base rent. 

 This can be a frustrating process if you're dealing with a landlord who intentionally withholds information. The reasoning behind this perhaps is to "lowball" the rental in the fear that the initial offering may be perceived too high and/or, when the undisclosed charges do come to light the tenant is too far into the transaction process to walk away. If the landlord's really lucky, the tenant won't learn of the undisclosed charges until the lease is signed and the tenant gets its first billing statement.

Below is a breakdown of typical common area expenses. It's critical to keep in mind that these charges vary from landlord-to-landlord. Some may be included in the base rent. Some may be combined and called something else entirely. There is no dictionary or standard terminology. 

Click image to enlarge.

CAM  

 

 

 

 

 

 

 

Don't rely on real estate jargon such as net, triple net, gross, modified gross, plus tenant electric, etc. These terms mean absolutely nothing. You have to ask each landlord specifically what additional charges there are on each building. If you're considering multiple leasing options with a landlord owning multiple buildings, his charges may vary on each building.

This due diligence can amount to a lot of tedious work which, may lead to a nasty surprise if you lose focus because you're busy running your business. A better way to go would be to engage a real estate professional to collect and provide to you with accurate information on each lease option as part of the transaction management process.

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