Raw CAM totals tell you very little. A store paying $52,000 per year in CAM and a store paying $28,000 per year in CAM are not obviously comparable without knowing the store sizes, property types, and expense compositions behind each number.
The goal of cross-location comparison is not to find the store that pays the most — it is to find the store whose costs are anomalous relative to what they should be given the property it occupies. That requires normalization. Normalization is not complicated, but it takes a deliberate structure.
Step 1: Normalize for Store Size
The foundational normalization is per-square-foot. Dividing total CAM by leased square footage converts each store's absolute CAM total into a rate that can be meaningfully compared across different store sizes.
A 2,400 SF store paying $52,000 in CAM is paying $21.67/SF. A 1,800 SF store paying $28,000 in CAM is paying $15.56/SF.
The larger store is paying more in absolute terms, but the smaller store may actually be a more efficient or better-negotiated lease — or the smaller store may be on a fundamentally different type of property.
CAM/SF is the primary metric. Track it for every location, every year.
Step 2: Control for Property Age and Type
Not all CAM/SF figures are comparable even after normalizing for size. A store in a 1990s-era strip center will often have higher maintenance costs than a store in a 2015-era power center, because older properties have older infrastructure. A store in a high-density urban location often pays more in CAM than a suburban stand-alone location because there are more services to maintain.
Useful property categories for comparison:
- Regional mall anchor corridor vs. inline: Mall inline tenants often pay higher CAM/SF than strip center tenants due to shared facility costs
- Power center vs. neighborhood center: Power centers with major box tenants often have more common area maintenance to fund
- New construction (less than 10 years) vs. older properties: Maintenance costs tend to be lower on newer properties but capital reserves may be higher
- Urban vs. suburban vs. rural: Urban properties have higher security, cleaning, and utility costs
When you have stores across more than one property type, segment your comparison. Comparing a urban mall location to a suburban strip center without acknowledgment of property type differences produces a misleading comparison.
Step 3: Separate Controllable from Non-Controllable
CAM has two components with fundamentally different natures:
Non-controllable expenses: Property taxes and property insurance are passed through as assessed by the taxing authority or insurer. The landlord has limited ability to affect these, and you have no ability to negotiate them — you pay your pro-rata share of whatever the bill is.
Controllable expenses: Landscaping, janitorial, security, parking lot maintenance, utilities, and management fees are controllable in the sense that the landlord makes choices about vendors, service levels, and management methodology. These are the expenses that vary with management quality and efficiency.
When comparing stores, separate the controllable and non-controllable components. If two stores in the same metro area have similar property tax profiles but vastly different controllable expense rates, the controllable difference is worth investigating. It may reflect a difference in service level, a difference in vendor pricing, or a potential calculation error.
Step 4: Flag Outliers
An outlier is a store whose CAM/SF differs materially from the portfolio average after controlling for property type. "Material" in this context means more than 20-25% above the portfolio average for comparable property types.
Outliers require investigation, not automatic assumption of error. The outlier may reflect:
- A larger CAM pool at the property (more common area to maintain)
- A higher-service-level property (valet parking, more landscaping, 24-hour security)
- A one-time event (major repair, special assessment)
- A systematic error (wrong denominator, excluded expense not excluded)
Investigation starts with the reconciliation: pull the expense ledger and look at which line items are driving the high per-SF cost. Then compare those line items to the lease provisions to confirm they are permitted.
5-Store Comparison Example
Here is a comparison table for a 5-store operator across similar suburban strip center locations:
| Store | SF | Total CAM | CAM/SF | YoY Change | Notes |
|---|---|---|---|---|---|
| A | 2,200 | $33,000 | $15.00 | +4% | Consistent with prior years |
| B | 1,900 | $28,500 | $15.00 | +3% | Consistent |
| C | 2,400 | $48,000 | $20.00 | +28% | Outlier — 33% above avg |
| D | 2,100 | $29,400 | $14.00 | +2% | Below average — favorable |
| E | 2,300 | $34,500 | $15.00 | +5% | Consistent |
Portfolio average: $14.80/SF (excluding Store C) Store C: $20.00/SF — 35% above portfolio average and +28% year-over-year change
Stores A, B, D, and E have consistent, similar CAM/SF on comparable property types. Store C is a clear outlier on both dimensions. Investigation is warranted.
First questions to answer for Store C:
- Is the property type or age different? (It's described as similar, so this may not explain it)
- Was there a one-time event (major repair, parking lot resurfacing, special assessment)?
- Did the denominator change? (Anchor departure, vacancy increase)
- Is the management fee being calculated above the lease cap?
If Store C has a management fee cap of 4% and the actual fee charged is 6% of a $280,000 CAM pool, that's $5,600 in excess charges per year. Over 5 years, that's $28,000 — and it's within the audit window for current and prior years.
What to Investigate When You Find an Outlier
Not every outlier is an error. But every outlier deserves a documented explanation. The process:
- Pull the detailed reconciliation for the outlier location
- Compare expense categories to the prior year's reconciliation for the same location
- Identify which category is driving the increase (is it taxes? management fees? utilities?)
- Check whether that category is billable under the lease terms
- If the category is correct but the amount is unusually high, request invoice backup from the landlord
If the explanation is a one-time event — the landlord repaved the parking lot and allocated the cost to CAM as routine maintenance rather than capital — that may itself be a dispute worth raising (capital expenditures are typically excluded from CAM in properly drafted leases).
Verification Action
Build the comparison table above for your portfolio right now. Enter total CAM, SF, and CAM/SF for every location for the most recent completed year. Sort by CAM/SF. Identify any store that is more than 20% above the average for comparable property types. That store is your starting point for the current year's CAM review focus.
Frequently Asked Questions
What if all my locations are in different property types and I can't make direct comparisons? You can still track CAM/SF over time for each individual location. Year-over-year change at the same location is a meaningful comparison even without cross-location benchmarks. A location that has increased 8% per year for three years in a market with 3% inflation warrants review regardless of where it sits relative to other stores.
Should I include base rent in the comparison or just CAM? For occupancy cost benchmarking purposes, comparing total occupancy cost per SF (base rent plus all NNN) is useful for understanding overall lease quality. For CAM-specific review, separate the components. Including base rent in CAM analysis obscures whether the CAM cost specifically is anomalous.
What's a typical CAM/SF range for franchise retail? CAM/SF varies significantly by market, property type, and service level. Urban markets with high land costs can run $20-30+/SF. Suburban strip centers often run $8-18/SF. What matters most is consistency within your own portfolio and comparison to concept-level benchmarks if your franchisor publishes them.
Can I request CAM/SF data from my franchise development team to benchmark against other franchisees? Yes, and this is a legitimate request. Some franchisors publish this data in the FDD as part of financial performance representations. Others may share aggregate benchmarks through the FBC or franchisee association. If the system doesn't publish it, propose it as an FAC initiative.
What if my landlord changes the expense categories between years, making year-over-year comparison difficult? Category changes — grouping previously separate expenses together, or splitting one category into multiple — are a common source of comparison difficulty. When you request backup documentation, ask for the current and prior year reconciliation in the same category structure, or map the categories manually to ensure you're comparing like-to-like.
The CAM overcharge estimator provides a preliminary view of CAM cost exposure across franchise locations before a formal audit.