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Calculating Common Area Maintenance ( C A M)


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Calculating the Common Area Maintenance cost for retail properties

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Calculating Common Area Maintenance ( C A M)

  1. 1. How Common Area Maintenance (CAM) is Calculated? Marcus Bourn [email_address]
  2. 2. Definitions: <ul><li>Common Area Maintenance (CAM) </li></ul><ul><li>The amount of money charged to tenants for their shares of maintaining a center’s common areas or shared services and utilities. </li></ul>
  3. 3. Definitions: <ul><li>Gross Leasable Area (GLA) </li></ul><ul><li>The square footage of a shopping center that can generate income by being leased to tenants. </li></ul>
  4. 4. Explanation <ul><li>The formula for calculating the CAM is based upon taking the square footage of the space being occupied by the Tenant (Tenant’s Square Footage) and dividing that number by the GLA of the shopping center. The resulting number will be the prorated percentage of the common area maintenance the Tenant is expected to pay to the Landlord for maintaining the premises. </li></ul>
  5. 5. The Formula <ul><li>Tenant’s Square Footage </li></ul><ul><li>Gross Leasable Area (GLA) </li></ul><ul><li>Common Area Maintenance (CAM) </li></ul>=
  6. 6. Example <ul><li>Tenant’s Space: 3,000 Square Feet (SF) </li></ul><ul><li>GLA: 50,000 Square Feet (SF) </li></ul><ul><li>3,000 SF </li></ul><ul><li>50,000 SF </li></ul><ul><li>You must multiply the 0.06 by 100 to get the percentage of the shopping center represented by the Tenant which is 6% </li></ul>= 0.06
  7. 7. Resources <ul><li>ICSC’s Dictionary of Shopping Center Terms </li></ul><ul><li>Dealmaker’s Guide to Commercial Real Estate by Ray Alcorn </li></ul>
  8. 8. Thank You <ul><li>For all questions and comments, please e-mail me at: </li></ul><ul><li> [email_address] </li></ul><ul><li>I hope this helps you understand how to get the best deal. </li></ul>