Glossary
Calculations & Formulas
Weighted Average
A blended pro-rata share calculation used when a tenant's square footage, or the building's total leasable area, changes partway through the year. Instead of applying one share percentage to the whole year, the correct calculation weights each period by how long it was in effect.
Firm impact
A landlord who skips the weighted average and applies a single point-in-time share to the full year either overcharges or undercharges the client, depending on which direction the square footage changed. Firms that catch this get a clean finding tied directly to the rent roll.
How this gets abused
A tenant expanded from 5,000 to 7,000 SF on July 1. The landlord applies the higher 7,000 SF share to the entire 12-month reconciliation instead of weighting six months at the old share and six months at the new one, overcharging the tenant for half a year they weren't yet occupying the larger space.
Practitioner note
Whenever a client's square footage or the building's total area changed mid-year, request the effective dates and recalculate the weighted average share yourself rather than accepting the landlord's blended number.
Related terms
FAQ
Questions about weighted average
When does a weighted average calculation apply?
Whenever a tenant's leased square footage changes mid-year, or the building's total leasable area changes (new construction, a demolished wing), the pro-rata share for that year should be blended across the periods it applied.
How do you test for a missing weighted average?
CAMAudit's Pro-Rata Share Error rule checks the share and denominator against the lease. When square footage changed mid-year, your team should also confirm the statement used a blended share for the periods before and after the change instead of a single share applied to the full year.
You know the term. Now check the math.
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