Glossary
Building Operations
Landlord Overhead
Internal costs of running the landlord's own business, such as corporate officer salaries, head office rent, leasing commissions, and marketing expenses, that are explicitly excluded from the recoverable expense pool in most commercial leases.
Firm impact
Landlord overhead pass-throughs are a reliable finding in large portfolio leases where the property management function is integrated with corporate operations. The larger the landlord's internal overhead, the greater the risk of bleed into the tenant-facing CAM pool.
How this gets abused
A national REIT included 12% of its regional VP of Property Management's salary in the operating expense pool for each property they managed, reasoning that 12% of her time was attributable to each asset. The lease explicitly excluded above-grade salaries.
Practitioner note
Check the CAM pool for line items labeled 'management allocation,' 'corporate overhead,' or 'regional office expenses.' These are signals of landlord overhead bleed. Request the full general ledger for the reconciliation year and cross-reference against the lease exclusions list.
FAQ
Questions about landlord overhead
What is the most common form of landlord overhead in the CAM pool?
Above-grade salary allocations, shared services charges from parent entities, and internal administrative fees charged by property management companies to their own managed properties. These appear under varying labels but all represent non-recoverable internal overhead.
Does CAMAudit detect landlord overhead pass-throughs?
Yes. CAMAudit's Landlord Overhead Pass-Through rule classifies expense line items to identify categories the lease excludes, such as above-grade salaries, corporate office costs, and leasing commissions, flagging them as non-recoverable.
You know the term. Now check the math.
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