What Is Included in CAM Expenses? The Full List (and What Should Be Excluded)
CAM expenses (Common Area Maintenance expenses) typically include: landscaping and groundskeeping, parking lot maintenance and lighting, exterior cleaning and janitorial, security systems and personnel, property management fees (typically 3–5% of gross revenues), snow removal, common area utilities, trash removal, exterior signage, and HVAC for shared areas. What is excluded depends on your specific lease language, and that distinction is where most overcharges originate.
CAM expenses, also called CAM charges, are the costs of operating and maintaining shared property areas outside a tenant's leased space. In a standard NNN lease, each tenant pays a pro-rata share of these expenses annually. The list of what qualifies as a CAM expense is one of the most disputed areas in commercial real estate: Tango Analytics found that 40% of CAM reconciliations contain material errors, with misclassified expenses as the leading cause.
Most leases define "CAM" broadly, leaving landlords significant discretion over what enters the expense pool. Understanding what belongs, and what doesn't, is the difference between paying what you owe and paying what the landlord decides to include.
| CAM Expense Category | Typically Included | Often Disputed |
|---|---|---|
| Parking lot maintenance & resurfacing | ✓ | — |
| Landscaping & snow removal | ✓ | — |
| Common area janitorial | ✓ | — |
| Exterior lighting & signage | ✓ | — |
| Property management fees | ✓ | ✓ (rate & base) |
| Common area utilities | ✓ | — |
| Building security | ✓ | — |
| Capital improvements (roof, HVAC) | — | ✓ (often improperly included) |
| Landlord income taxes | — | Rarely |
| Leasing commissions & TI allowances | — | ✓ (sometimes included improperly) |
| Insurance proceeds-covered repairs | — | ✓ (double-billing risk) |
Standard CAM expenses: what is typically included
Across retail, office, and industrial leases, the following expense categories appear in most CAM pools:
Parking lot and exterior maintenance
Resurfacing, restriping, sweeping, snow removal, and salting fall here. For retail and industrial properties, parking lot maintenance is often the largest single CAM line item. These are genuine operating expenses, the parking lot wears down and needs regular maintenance.
Landscaping
Lawn care, irrigation, tree trimming, and seasonal plantings. On a multi-tenant retail center, landscaping can run $0.25–$0.75 per square foot per year depending on the property's size and the region's climate.
Exterior lighting
Operating and maintaining parking lot lights, building exterior lighting, and common area signage illumination. Utility costs for common area lighting flow through CAM unless the lease specifically excludes them.
Janitorial services (common areas)
Cleaning lobbies, restrooms, hallways, and other shared interior spaces in multi-tenant buildings. For office properties, interior janitorial is typically the largest or second-largest CAM component. For strip centers and industrial parks, common area janitorial is minimal.
Property management fees
The property manager's fee for administering the property, collecting rent, supervising vendors, and handling tenant communications. This is the most disputed standard inclusion. Most leases cap management fees at 3–6% of gross revenues, but disputes arise over what revenue base the percentage applies to and whether fees paid to related-party affiliates are billed at market rates.
Building security
Security personnel, surveillance systems, and access control maintenance for shared areas. Security costs have risen significantly at Class A office properties and enclosed retail centers.
Utilities for common areas
Electricity, water, and HVAC for shared lobbies, corridors, parking structures, and mechanical rooms. These are variable expenses that can be grossed up under most lease gross-up clauses.
Administrative and overhead costs
The landlord's internal administrative costs for managing the property, often included as a percentage of total CAM. This category gets abused. Administrative overhead at 15% of total CAM is defensible; administrative overhead at 30% warrants scrutiny.
CAM expenses that should NOT be included
The following categories appear in CAM expense pools regularly but are either contractually excluded under most well-drafted leases or legally questionable:
Capital expenditures (CapEx)
Capital improvements, roof replacement, parking lot reconstruction, HVAC system replacement, elevator modernization, must be depreciated over their useful life under standard accounting principles. A full roof replacement costing $400,000 should not hit the CAM pool as a single-year operating expense. Tenants who have explicitly excluded capital expenditures in their leases can dispute these charges directly.
Even without an explicit CapEx exclusion, charging 100% of a capital improvement in year one is economically indefensible if the improvement benefits the property for 20+ years.
Landlord's income taxes
Federal, state, and local income taxes on the landlord's rental income are never a legitimate CAM charge. They're a landlord obligation, not a property operating expense.
Ground lease payments
If the landlord leases the land under the building from a ground lessor, those ground rent payments are not a CAM expense. They're a landlord financing cost.
Costs for vacant tenant spaces
Tenant improvements, leasing commissions, and expenses to make vacant spaces attractive to new tenants are landlord investment costs, not operating expenses passed to existing tenants. Some landlords include tenant improvement allowances in CAM; this is nearly always a lease violation.
Costs covered by insurance
If a storm damages the building and the insurance company pays the repair, the repair cost should not also appear in CAM. Double-charging, billing CAM for costs already recovered through insurance, happens, and it requires reviewing both the CAM ledger and the property's insurance claims history to catch.
Above-property management fees
Property management companies sometimes charge fees at the corporate level (for oversight, accounting systems, or regional management) that are separate from the property-level management fee. Tenants should verify whether the lease limits management fees to "property-level" or "on-site" management, many leases do, and above-property fees charged on top violate that limitation.
How CAM exclusions work in practice
Exclusions are negotiated at signing and written into the lease. Common exclusions in tenant-favorable leases include:
- Capital expenditures: "Notwithstanding the foregoing, CAM shall exclude capital improvements, replacements, or repairs... except to the extent amortized over the useful life of such improvement..."
- Anchor tenant exclusions: In retail centers, tenants sometimes negotiate to exclude anchor tenant spaces from the denominator calculation so their pro-rata share reflects only the in-line tenant pool
- Controllable expense caps: A provision limiting how much "controllable CAM expenses" (management fees, landscaping, janitorial) can increase year-over-year, typically 3–5% annually
- Related-party management fees: A requirement that management fees paid to the landlord's affiliates not exceed the market rate for comparable properties
The CAM lease language guide covers how to draft these exclusions and what landlord-favorable pushback to expect.
CAM by property type
What's actually in the pool varies by property type. Here's what to expect:
Retail (strip center / power center)
- Parking lot maintenance, landscaping, and lighting typically comprise 50–70% of total CAM
- Property management fees usually 3–5% of revenues
- Security varies significantly by center type
- CAM benchmarks: $3–$10 per square foot per year
- Specialty retail tenants like automotive dealerships often face site-specific overcharges tied to lot maintenance and exterior lighting that generic retail benchmarks don't capture
Office (multi-tenant building)
- Janitorial and HVAC dominate (often 40–60% of total CAM)
- Building operating costs total $15.76 per square foot on average, according to the BOMA 2022 Office Market Study
- Security and lobby services add $1–3 per square foot annually
- CAM benchmarks: $8–$15 per square foot per year
Industrial (warehouse / distribution)
- CAM is minimal by nature, mostly parking lot maintenance, exterior lighting, and minimal landscaping
- CAM benchmarks: $0.15–$3 per square foot per year
- Many industrial leases are "absolute NNN" where the tenant contracts directly with vendors
The gross-up issue
What gross-up is supposed to do
Gross-up clauses allow landlords to adjust variable CAM expenses to what they would be at stabilized occupancy (typically 95–100% leased). This prevents a single tenant in a half-empty building from paying for the whole building's utilities.
Why gross-up creates overcharges
The problem: gross-up is supposed to apply only to variable expenses, costs that genuinely change with occupancy, like utilities, janitorial, and some management fees. Fixed expenses (property taxes, insurance, landscaping contracts) don't increase when the building fills up, so grossing them up inflates the CAM pool with phantom costs.
This is one of the 14 detection rules in CAMAudit's forensic analysis. See the CAM Overcharge Detection Playbook for how to identify it.
How to check your CAM statement
When you receive a reconciliation, request the backup documentation:
- The full general ledger for the CAM pool (line-by-line expense listing)
- Vendor invoices for the largest line items
- The management fee calculation, what base it applies to and at what rate
- The pro-rata share calculation showing numerator (your square footage), denominator (total leasable area), and the result
Compare each line against your lease's CAM definition and exclusion language. Any category not explicitly permitted, or any excluded category that appears, is a disputed charge.
Frequently Asked Questions
Is property management included in CAM charges?
Yes, in most NNN leases. Property management fees are one of the most common CAM inclusions. The lease should specify the maximum percentage, typically 3–6% of gross revenues. The dispute issues arise when the fee is calculated on a different revenue base than the lease defines, when related-party fees exceed market rates, or when above-property management charges are added on top of the on-site fee.
Can a landlord include roof repair in CAM?
It depends on the lease and the nature of the repair. Routine roof maintenance, patching, cleaning, routine inspections, is generally a legitimate CAM expense. A full roof replacement is a capital expenditure and should not be included as a single-year operating expense in most leases. If your lease contains an explicit capital expenditure exclusion, a full roof replacement is not a valid CAM charge regardless.
What are controllable vs. uncontrollable CAM expenses?
Controllable expenses are those the landlord can manage, janitorial service, landscaping contracts, property management fees. Uncontrollable expenses are those outside the landlord's direct control, utility rates, property taxes, insurance premiums, and emergency repairs. Lease caps on controllable expenses typically limit annual increases to 3–5%, protecting tenants from sudden jumps in management fees or contractor costs.
Is HVAC maintenance included in CAM?
HVAC maintenance for common areas (lobbies, corridors, parking structures) is a standard CAM inclusion. HVAC maintenance for your leased space is typically your own responsibility under an NNN lease. For office buildings, common-area HVAC is often the largest or second-largest CAM line item.
How do I know if I'm being overcharged on CAM?
The clearest signal is a CAM reconciliation that includes categories your lease doesn't permit, capital expenditures, above-property management fees, or costs for vacant spaces. Subtler signals include: a pro-rata share that seems higher than your percentage of the building, management fees that appear to be calculated on a different base than the lease specifies, or year-over-year increases that exceed any caps negotiated in your lease.
For a deeper look at the 12 specific ways CAM bills contain recoverable overcharges, see the CAM Overcharge Detection Playbook. To understand how CAM fits in the broader NNN lease structure, read the NNN Lease Tenant Guide.
Want to know if your CAM statement is accurate? Run a free audit, the full forensic analysis runs in under 15 minutes.
Frequently Asked Questions
What is typically included in commercial CAM charges?
Standard CAM inclusions are: parking lot maintenance and resurfacing, exterior lighting, landscaping, snow removal, common area cleaning, property management fees, security for common areas, and shared utilities for lobbies and corridors. What qualifies is defined by the lease, and broad lease language gives landlords significant discretion over what enters the pool.
What expenses are typically excluded from CAM charges?
Items commonly excluded from well-drafted leases include: capital expenditures (major roof replacement, structural repairs), leasing commissions and tenant improvement costs for other spaces, executive salaries above property-manager level, debt service and depreciation, income taxes, costs covered by insurance proceeds, and expenses specific to anchor or other excluded tenants.
Can a landlord include capital expenditures in CAM charges?
Only if the lease permits it, either explicitly or through language broad enough to cover CapEx. Standard NNN leases exclude capital expenditures from CAM. Some leases permit amortized capital expenditures, where the cost of a major improvement is spread over its useful life and billed as an annual operating expense. If your lease is silent on CapEx, a challenge is viable.
Are management fees part of CAM charges?
Yes, in most NNN leases. Property management fees are a standard CAM inclusion. The rate is typically capped at 3% to 6% of gross revenues or operating expenses, and the fee base is defined by the lease. When management fees are applied at a rate above the cap or on a base that includes excluded expenses, the excess is a recoverable overcharge.
How do I know if my CAM bill includes items that should be excluded?
Compare the reconciliation's line items to your lease's operating expense definition and exclusion list. Any category that appears in the reconciliation but is absent from the permitted inclusions or is explicitly listed as an exclusion is challengeable. Subtler issues, like CapEx amortized as operating expense, require reviewing actual invoices against the line item descriptions.