Glossary
Expenses & Charges
Occupancy Cost
The all-in cost of occupying a space: base rent plus CAM, real estate tax, and insurance pass-throughs combined. Firms use occupancy cost as a single benchmark figure to judge whether a client's total spend is in line with comparable properties, separate from any single-line dispute.
Firm impact
A client can win every individual CAM finding your firm identifies and still be paying above-market rent overall. Occupancy cost gives your firm a way to talk with the client about the bigger picture, not just the line items you disputed this year.
How this gets abused
Say a tenant's occupancy cost runs 30% above comparable tenants in the same submarket, even after your firm corrects every CAM overcharge it found. That gap points to a base rent or escalation problem the CAM audit alone won't fix, and it's worth flagging before the client's next renewal.
Practitioner note
Calculate occupancy cost per square foot and compare it against market data for similar buildings before a lease renewal conversation. Treat it as a useful add-on to a CAM audit engagement, not a replacement for the line-by-line overcharge work.
FAQ
Questions about occupancy cost
What's included in occupancy cost?
Base rent plus the recurring pass-throughs a tenant pays on top of it: CAM, real estate tax, and insurance. Some firms also fold in utilities the tenant pays directly.
Is occupancy cost the same thing as a CAM audit finding?
No. Occupancy cost is a benchmarking figure used to judge whether a client's total spend looks reasonable for the market. A CAM audit finding is a specific, dollar-quantified overcharge tied to a lease provision.
You know the term. Now check the math.
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