Security costs at retail shopping centers range from a few thousand dollars annually for a basic lighting-and-camera setup to six-figure budgets for properties with staffed guard patrols, sophisticated access control, and centralized monitoring. How those costs get divided among tenants — and which costs belong in the CAM pool at all — is a question worth examining when the security line in your reconciliation is material.
What's Legitimately Common Area Security CAM
Security measures that protect shared spaces and all tenants equally are the clearest CAM candidates:
Exterior lighting systems serving the parking lot, walkways, and perimeter. Operating costs (electricity) for exterior lighting are standard CAM. Lamp and ballast replacement is operating maintenance.
Parking lot security cameras covering shared areas visible to all tenants. Monitoring fees, internet connectivity costs, and routine maintenance for cameras positioned at common area entry/exit points, parking lanes, and building perimeters are generally legitimate CAM.
Security patrol services for the property as a whole. If the landlord contracts with a security firm for periodic patrol of the parking lot and common areas, the cost is typically passable CAM allocated across all tenants.
Key card or access control systems for shared building entrances. Annual licensing fees and maintenance for access control systems securing common entry points can be legitimate CAM if the system serves the whole building.
What to Question
Security camera systems installed specifically for an anchor tenant. When an anchor retailer requires extensive camera coverage of their loading dock, their dedicated perimeter, and their interior exits as a condition of their tenancy, that cost is arguably serving the anchor's specific security requirements rather than the property as a whole. If the anchor's camera infrastructure is billed as shared CAM, you're paying a share of the anchor's private security investment.
Capital installation costs for new security infrastructure. Installing a new camera system — conduit runs, cameras, DVR hardware, control panels — is a capital expenditure with a useful life of 5–10 years. Installing the system and passing the full cost through in a single year as CAM (rather than amortizing it) follows the same capital-vs.-operating pattern as parking lot resurfacing. The annual monitoring and maintenance fees are operating; the hardware installation is capital.
Security personnel costs for events or incidents beyond normal operations. Extra security coverage for a specific event (a grand opening, a holiday weekend promotion) or in response to a specific incident at one tenant's location is not typical common area maintenance. If a security staffing spike in the CAM reconciliation traces to something serving a specific tenant's needs, it may not be proportionately allocable to all tenants.
Landlord entity security costs. If the landlord has an on-site management office at the property, security for that office is a landlord overhead cost, not a common area operating expense. Separating the management office security from the property security in the billing isn't always done.
How to Verify the Security Charge
Step 1: Pull the security-related line items. Security may appear as a single line ("Security") or broken into subcategories ("Security — Patrol," "Security — CCTV Monitoring," "Security — Lighting"). Note the totals.
Step 2: Request the underlying invoices or contracts. Security patrol contracts will specify the property address, patrol frequency, and service scope. Camera monitoring contracts will identify the number of cameras and locations. Hardware installation invoices will show the project scope.
Step 3: Identify anchor-specific installations. Look for camera locations described by the invoices as serving specific tenant spaces, loading areas for specific tenants, or the anchor's dedicated perimeter. If a significant portion of the camera installation served the anchor's requirements, that portion should not be in the shared CAM pool — particularly if the anchor has a CAM exclusion.
Step 4: Identify capital vs. operating costs. Apply the same capital analysis as other line items. Monitoring fees, patrol contracts, and electricity are operating. Hardware installation and wiring are capital. Verify that the reconciliation includes only the operating costs (or properly amortized capital costs if your lease permits).
Step 5: Calculate proportionality. Your pro-rata share of security costs should be based on your RSF relative to the denominator, like all other CAM. If the security cost allocation uses a different allocation (e.g., number of tenants rather than RSF), check whether your lease permits an alternative allocation methodology.
The Access Control Capital Pattern
A pattern that appears in reconciliations for properties that underwent recent renovations or management transitions: a new access control or surveillance system was installed as a capital project, and the first year's reconciliation includes the full installation cost rather than an amortized fraction.
Example: A new 40-camera surveillance system with DVR hardware, fiber network infrastructure, and installation labor costs $85,000. In the first year of operation, the reconciliation shows $85,000 in the security line. In a property with 30 tenants averaging 3% pro-rata shares, each tenant is billed $2,550 for a capital installation that has a 10-year useful life. The annual operating cost (monitoring and maintenance) might be $6,000–$8,000 for the whole property, translating to $180–$240 per tenant per year — a very different number.
If your lease excludes capital improvements from CAM without an amortization carve-back, the hardware installation cost is not passable. If your lease has an amortization carve-back for certain capital, the amortized cost ($85,000 / 10 years = $8,500/year) rather than the full project cost ($85,000) should appear in the reconciliation.
The Proportionality Question
Even when security costs are legitimately common area operating expenses, you should verify that the allocated amount is proportionate to the services actually provided. If you occupy 3% of the leasable area, you should pay 3% of the security cost — not more, regardless of the property manager's methodology.
Some landlords allocate security costs per tenant rather than by RSF, which disadvantages smaller tenants who pay the same share as larger ones despite benefiting from the same service. Unless your lease specifies a per-tenant allocation methodology, the default pro-rata by RSF applies.
Run your CAM reconciliation through CAMAudit to see which security line items trigger a classification or capital flag.
Frequently Asked Questions
Can the landlord install security cameras inside the common areas adjacent to my store entrance?
Yes, if they're documenting common area activity — foot traffic, common area incidents, parking lot coverage. Cameras pointed into your store interior without your consent raise different legal questions, but cameras in the common areas (including the area directly in front of your entrance) are typically the landlord's right and are legitimately part of common area operations.
What if the security contract was negotiated primarily to satisfy the anchor's requirements?
If the anchor required a specific security level as a condition of their tenancy (sometimes specified in co-tenancy agreements), and that security level substantially exceeds what the property would otherwise need, there's a reasonable argument that the anchor's incremental security demand is an anchor-specific cost that shouldn't be spread across all tenants. This argument is more viable if the anchor also has a CAM exclusion.
Is access control for after-hours tenant entry CAM?
If the access control system secures common building entries used by multiple tenants for after-hours access, the operating cost (licensing, maintenance) is likely legitimate CAM. If it was installed exclusively for one tenant's after-hours operations, it may not be.
How does security cost interact with a CAM cap?
Security patrol and monitoring fees are controllable operating expenses subject to any CAM controllable expense cap in your lease. Security hardware installations are capital and should be excluded from the CAM pool entirely (or amortized if your lease allows it), regardless of whether you have a cap.
What documentation should I request to verify security costs?
Request: the security patrol service contract, the CCTV monitoring agreement, any invoices for security hardware installation, and the invoices for exterior lighting maintenance. For patrol contracts, look for the patrol frequency and whether the scope covers the whole property or specific areas.
Can the security costs for a 24/7 patrol be allocated to tenants whose stores are closed at night?
Yes. Common area security operates for the benefit of the whole property, including protection of tenant improvements and inventory after hours. The cost is allocable to all tenants regardless of individual hours of operation.