Common Area Maintenance (CAM) reconciliations are an essential aspect of commercial real estate leases, particularly in multi-tenant properties. CAM reconciliations are important for both landlords and tenants, albeit for different reasons:

Importance of CAM Reconciliations for Landlords:

1. Cost Recovery: help landlords recover costs associated with operating and maintaining common areas and shared facilities in the property.
2. Profitability: crucial for landlords to ensure the property remains profitable. These reconciliations help distribute the operational costs fairly among tenants, which can help attract and retain high-quality tenants.
3. Budgeting: provide landlords with a clear picture of the property’s operating expenses. This information is vital for budgeting and financial planning, as it allows landlords to estimate future expenses accurately.
4. Transparency: Accurate CAM reconciliations promote transparency in landlord-tenant relationships, which is crucial for maintaining a positive and trusting partnership.

Importance of Reviewing CAM Reconciliations as a Tenants:

1. Cost Control: reviewing CAM reconciliations is essential to ensure that you are only paying your fair share of common area expenses.
2. Understanding Expenses: Reviewing CAM reconciliations allows tenants to understand the breakdown of common area expenses. This information can be used to negotiate more favorable lease terms in the future or to evaluate whether the current space remains cost-effective.
3. Dispute Resolution: In case of disputes or disagreements between tenants and landlords regarding CAM charges, reviewing reconciliations provides a basis for discussion and negotiation.

CAM reconciliations play a crucial role in safeguarding tenants’ interests and ensuring fair and accurate assessments of CAM charges. By diligently reviewing CAM reconciliations, tenants can mitigate the risk of overcharges and maintain transparency in their lease agreements. Partnering with experts like RMI for a comprehensive review not only provides peace of mind, but also ensures alignment with prevailing market standards. Please call or email Eric to learn more.