Common Area Maintenance (CAM) charges are an essential part of commercial real estate (CRE) leasing, covering shared expenses like property maintenance, insurance, and security. These charges are typically distributed among tenants based on their leased square footage, ensuring that common areas remain well-maintained.
However, estimating CAM costs accurately can be tricky, as expenses fluctuate throughout the year. This is where CAM reconciliation comes into play. It’s the year-end process where actual expenses are compared to estimated charges, leading to adjustments for tenants if they overpaid or underpaid.
For property managers, asset managers, and owners, CAM reconciliation is crucial to maintaining financial transparency, ensuring accurate recoveries, and fostering tenant trust. Yet, the process is often cumbersome and prone to errors.
Despite its importance, CAM reconciliation presents several hurdles for CRE professionals:
🔹 Complex expense calculations – CAM structures vary, with fixed CAM, year-over-year caps, and base-year methods, making calculations challenging.
🔹 Data discrepancies – Budgeted vs. actual expenses often don’t align, requiring detailed verification and manual adjustments.
🔹 Lack of transparency – Without clear documentation, tenants may dispute charges, leading to friction and delayed payments.
🔹 Time-consuming process – Managing CAM reconciliation across multiple properties manually takes time, increasing the risk of errors and inefficiencies.
To overcome these challenges, CRE professionals need a system that simplifies tracking, automates calculations, and ensures accuracy.