What Expenses Should Be Included in CAM?
A commercial real estate guide to capturing what belongs in the CAM pool, protecting recovery, and matching inclusion to each tenant's lease.
What belongs in CAM is where recovery begins or quietly ends.
Every dollar correctly captured in the CAM pool is a dollar the property has the chance to recover. Every recoverable dollar that never makes it into the pool is income the owner absorbs, usually without noticing.
Many teams capture only the obvious categories and leave real recoverable costs stranded in the general ledger. Just as often, teams treat what is included in CAM as if it were automatically recoverable from every tenant, when recovery is actually governed lease by lease.
What Is CAM, and What Does It Cover?
CAM stands for common area maintenance. In a commercial real estate lease, CAM charges are the amounts tenants pay to reimburse the landlord for the cost of operating, maintaining, and, where the lease allows, repairing the shared areas of the property. Common areas are the parts of a property that benefit tenants collectively rather than any single tenant: parking fields, sidewalks, landscaped areas, shared lighting, common corridors, and the systems that keep those areas functioning.
The purpose of CAM is straightforward. A multi-tenant property incurs real costs to keep the common areas clean, safe, lit, and functional, and those costs are shared among the tenants who benefit from them. CAM is the mechanism that allocates those shared costs back to the tenants according to the terms of their leases.
The categories below are the ones most commonly included in CAM. What matters is not only recognizing them but capturing them accurately, because the categories that are easy to overlook are exactly where recovery tends to leak.
The distinction that matters most: Included in CAM and recoverable from a given tenant are two different things. A category can be a normal part of the CAM pool while still being capped, excluded, or treated differently under a specific tenant's lease. CAM is incurred at the property level, but recovery is governed tenant by tenant.
Expenses Typically Included in CAM
The categories below are the ones most commonly included in a CAM pool. Actual recoverability for any tenant is always governed by that tenant's lease.
Site and Grounds
- Landscaping and grounds care, including mowing, planting, seasonal upkeep, and irrigation maintenance.
- Snow and ice removal, whether contracted at a flat rate or billed hourly for callouts.
- Parking lot maintenance, including sweeping, striping, patching, and parking lot lighting.
Utilities, Safety, and Cleaning
- Common area utilities, such as shared lighting, irrigation water, and any common meters serving the shared areas.
- Security and life safety, including patrol, monitoring, and the maintenance of fire and life safety systems.
- Common area janitorial and trash, including porter service for the common areas and shared trash removal.
Repairs, Systems, and Labor
- Common area repairs and maintenance, meaning routine repairs to the shared components of the property.
- Common area HVAC, where the system serves shared areas. How tenant-serving HVAC is handled varies by lease.
- Fully loaded maintenance labor, meaning the wages plus payroll burden for staff who maintain the common areas, not wages alone.
Fees, Insurance, and Taxes
- Management or administrative fee, where the lease allows it, often at a stated percentage and sometimes subject to a cap.
- Insurance, typically property and liability coverage for the shared areas, though some leases bill insurance separately from CAM.
- Real estate taxes, which are recoverable operating costs but are frequently passed through as a separate line rather than inside the CAM pool.
Two categories deserve special attention because they are where property teams most often go wrong in opposite directions. Fully loaded labor is frequently under-captured, because payroll is recovered at wages only and the burden is left behind. Capital expenditures are frequently mishandled, either included when the lease does not allow it or excluded reflexively when the lease actually permits amortized recovery. Both are covered in the mistakes and best-practices sections below.
Why It Matters to NOI
CAM is a recovery mechanism, and recovery directly protects net operating income. When a recoverable cost is captured in the CAM pool and billed under the leases, the property recovers it and the owner does not absorb it. When that same cost is left out of the pool, the owner absorbs it in full, and because the cost never entered the recovery analysis, no one is even aware the recovery conversation should have happened.
This is why the definition of what is included matters operationally and not just definitionally. A property that captures only the obvious categories will look like it is recovering CAM while quietly under-recovering, because the recoverable costs sitting outside the CAM map never get billed. Getting the inclusion question right is the first step in protecting the income the leases entitle the owner to recover.
Financial Impact
Consider an illustrative neighborhood retail center of about 28,000 square feet with CAM running near $7.75 per square foot, which produces an annual CAM pool of just over $217,000. If the property captures the visible categories but misses recoverable costs that are sitting in the general ledger under broad account titles, the pool that gets billed is smaller than it should be, and the difference is absorbed by ownership.
Loaded labor is a clear example. If a common-area porter is recovered at $18,000 in straight wages when the fully loaded cost, including payroll taxes, benefits, and workers' compensation, is closer to $24,200, the property leaves roughly $6,200 of legitimate, recoverable labor cost on the table every year. Repeat that pattern across shared services, maintenance contracts, and other recoverable costs that were never mapped, and a property can under-recover by a meaningful percentage while appearing to reconcile normally. These figures are illustrative and depend on the leases and the property.
Common Mistakes
- Following account titles too literally. Capturing only landscaping, snow, trash, and janitorial and leaving recoverable porter service, shared site labor, maintenance contracts, and common area inspections stranded in the general ledger.
- Recovering wages only. Billing common-area labor at straight wages without the payroll burden, which understates a legitimate recoverable cost.
- Confusing inclusion with recoverability. Assuming that because a category is normally part of CAM, every tenant pays it, when caps, exclusions, and gross structures vary by lease.
- Lumping tenant-specific charges into CAM. Charging costs that belong to a single tenant across the whole pool, which creates overbilling and dispute risk.
- Mishandling capital. Either including non-recoverable capital as if it were operating expense, or reflexively excluding capital the lease would allow to be recovered through amortization.
- Handling taxes and insurance inconsistently. Moving them in and out of the CAM pool without a clear, lease-based convention, which distorts comparisons and caps.
Best Practices
The following are operational property management practices, not legal advice.
- Build a property-level expense map from the general ledger with a CAM lens. Do not rely on account titles alone. Decide what belongs in the recovery analysis before deciding who pays for it.
- Capture fully loaded labor and shared services, including porter service, shared site labor, and recurring common area contracts that may not sit in obvious CAM accounts.
- Confirm recoverability tenant by tenant. Test each category against each lease so inclusion in the pool is matched to actual tenant obligations, including caps and exclusions.
- Separate tenant-specific charges from common-area charges, so costs that belong to one tenant are not spread across the pool.
- Adopt a consistent, lease-based convention for taxes and insurance, so they are handled the same way every cycle and cap calculations remain accurate.
- Review the capital log with the lease in mind, so amortizable, lease-supported capital is recovered and non-recoverable capital is excluded.
- Document what is included and why in the standing CAM abstract, so the inclusion decisions survive into the next cycle and do not depend on memory.
Operational vs. legal note: Whether a specific expense is recoverable under a given lease, particularly for capital, gross-up, and cap language, is a lease interpretation question. Operational review can map the costs, but confirm ambiguous lease language with qualified legal counsel.
How This Connects to the RECOVER Method™
Deciding what belongs in CAM is precisely the work of two stages of the RECOVER Method, the framework from The CAM Recovery Blueprint by Lisa Shull, CPM. Evaluate Expenses is the stage that builds a clean property-level expense map. Its central instruction is to look past account labels and decide what truly belongs in the recovery analysis, including the categories that do not sit in neat CAM buckets, such as loaded labor, recurring common area support contracts, and shared site services. The reason this matters is direct: if an expense never gets into the analysis, the recovery conversation never begins. That is the exact failure behind most under-capture.
Confirm Eligibility is the stage that keeps inclusion from being confused with recoverability. Once the property-level expense map exists, each meaningful category is tested against each tenant's lease. Some tenants participate fully, some are capped, some are excluded, and some participate in one category but not another. This is where a disciplined process resists the temptation to flatten differences for convenience, and it is why a category can be a normal part of CAM while a specific tenant still does not pay it.
Both stages begin, as the method always does, with Review the Lease. The lease defines what is recoverable in the first place, so the inclusion question is ultimately a lease question mapped onto the property's actual costs. Capturing what belongs in CAM, then confirming who owes it, is the recovery discipline that protects the income the leases already support.
CAM Inclusion Checkpoints
At minimum, confirm the following when determining what belongs in a property's CAM pool. The full inclusion reference table and verification checklist appear in the resource section below.
- The expense map was built from the general ledger with a CAM lens, not from account titles alone.
- Fully loaded labor and shared services were captured, not just the obvious categories.
- Each category was tested for recoverability tenant by tenant, including caps and exclusions.
- Tenant-specific charges were separated from common-area charges.
- Taxes, insurance, and capital were handled by a consistent, lease-based convention.
Key Takeaways
- CAM is the shared cost of operating and maintaining a commercial real estate property's common areas, allocated to tenants under their leases.
- Typical inclusions are landscaping, snow removal, parking upkeep, common area utilities, security, janitorial and trash, common area repairs, loaded labor, and often a management or administrative fee, with insurance and taxes handled per lease convention.
- The costs most often missed are the ones that do not sit in obvious CAM accounts, especially loaded labor and shared services, and missing them means the owner absorbs recoverable cost.
- Included in CAM is not the same as recoverable from every tenant, because caps, exclusions, and gross structures vary lease by lease.
- The discipline is to map property-level costs first, then confirm recoverability tenant by tenant, and document both in the standing CAM abstract.
Frequently Asked Questions
What does CAM stand for in commercial real estate?
CAM stands for common area maintenance. It refers to the shared cost of operating and maintaining a property's common areas, which tenants reimburse to the landlord under their leases. The common areas are the parts of a property that benefit tenants collectively, such as parking lots, sidewalks, landscaping, and shared lighting.
What expenses are typically included in CAM?
CAM typically includes landscaping and grounds, snow and ice removal, parking lot maintenance, common area utilities, security and life safety, common area janitorial and trash, common area repairs, common area HVAC, fully loaded maintenance labor, and often a management or administrative fee. Insurance and real estate taxes are recoverable operating costs that are sometimes included in CAM and sometimes billed separately.
Are real estate taxes and insurance included in CAM?
They are recoverable operating expenses, but whether they sit inside the CAM pool or are billed as separate pass-through lines depends on the lease and the property's convention. Many properties handle taxes and insurance as separate lines even though they are recovered from tenants. Consistency matters, because it affects cap calculations and year-over-year comparisons.
Is the management or administrative fee included in CAM?
Often, yes, where the lease allows it. The fee is usually a stated percentage of some portion of CAM, and it may be subject to a cap or excluded for certain tenants such as anchors. Because treatment varies by lease, the fee should be confirmed tenant by tenant rather than assumed.
Are capital expenses included in CAM?
Sometimes. Not every capital item belongs in CAM, but not every capital item should be dismissed either. Some leases allow recovery of defined capital categories, usually through amortization, such as cost-saving improvements or code-compliance work. The capital log should be reviewed against the lease before an item is either included or written off.
Does included in CAM mean every tenant pays it?
No. A category can be a normal part of the CAM pool while still being capped, excluded, or treated differently under a specific tenant's lease. CAM is incurred at the property level, but recovery is governed tenant by tenant. Confusing inclusion with recoverability is a common source of both under-recovery and overbilling.
What expenses are usually excluded from CAM?
Common exclusions include costs that belong to a single tenant rather than the common areas, capital expenditures the lease does not permit, and categories a particular lease carves out. Some leases also exclude items such as certain management fees, promotional costs, or specific repairs. Exclusions are defined lease by lease, so they must be confirmed against each tenant's terms.
How is labor treated in CAM?
Labor for staff who maintain the common areas is generally recoverable, but it should be captured at its fully loaded cost, meaning wages plus payroll burden such as taxes, benefits, and workers' compensation, not wages alone. Recovering wages only is a common way that a legitimate, recoverable cost is understated year after year.
Resource: CAM Inclusion Reference Table and Verification Checklist
Typical CAM Inclusion Reference Table
Use this table as a starting reference for what commonly belongs in a CAM pool. Actual recoverability for any tenant is governed by that tenant's lease.
| Category | Typically Included | Notes and Lease-Dependent Detail |
|---|---|---|
| Landscaping and grounds | Yes | Mowing, planting, seasonal upkeep, irrigation maintenance |
| Snow and ice removal | Yes | Flat contract or hourly callouts; often not grossed up |
| Parking lot maintenance | Yes | Sweeping, striping, patching, and parking lot lighting |
| Common area utilities | Yes | Shared lighting, irrigation water, common meters |
| Security and life safety | Yes | Patrol, monitoring, fire and life safety system upkeep |
| Common area janitorial and trash | Yes | Porter service for common areas and shared trash removal |
| Common area repairs | Yes | Routine repairs to shared components of the property |
| Common area HVAC | Often | Where it serves shared areas; tenant HVAC varies by lease |
| Fully loaded maintenance labor | Yes | Wages plus payroll burden, not wages only |
| Management or administrative fee | Often | Per lease; may be a stated percentage, capped, or excluded |
| Insurance | Often | Property and liability; sometimes billed separately from CAM |
| Real estate taxes | Varies | Recoverable, but frequently a separate pass-through line |
| Capital expenditures | Sometimes | Only where the lease allows, usually recovered by amortization |
| Tenant-specific charges | No | Belong to the individual tenant, not the shared CAM pool |
CAM Inclusion Verification Checklist
Complete when determining what belongs in a property's CAM pool.
| Verification Step | Confirmed |
|---|---|
| The expense map was built from the general ledger with a CAM lens, not from account titles alone. | ☐ |
| Porter service, shared site labor, and recurring common area contracts were reviewed for inclusion. | ☐ |
| Common-area labor is captured at its fully loaded cost, not straight wages only. | ☐ |
| Each category was tested for recoverability tenant by tenant. | ☐ |
| Caps, exclusions, and gross structures were applied where the leases require them. | ☐ |
| Tenant-specific charges were separated from common-area charges. | ☐ |
| Taxes and insurance were handled by a consistent, lease-based convention. | ☐ |
| The capital log was reviewed against the leases before including or excluding items. | ☐ |
| Non-recoverable costs were identified and kept out of the pool. | ☐ |
| Inclusion decisions and their basis were documented in the standing CAM abstract. | ☐ |