CAM & Commercial Lease Glossary

A

Additional insured

A party — usually the landlord, and often its lender and manager — added to a tenant's or vendor's liability policy so it is covered for claims arising from that party's operations. Most leases require it, and a certificate that doesn't list the right additional insureds doesn't satisfy the clause.

Additional rent

Everything a tenant pays under the lease besides base rent: its share of operating expenses, taxes, insurance, utilities and late charges. Calling these rent means the lease's rent remedies apply if they go unpaid.

Administrative fee

A percentage added on top of the expense pool to pay the landlord for administering the recovery. Common in retail, usually negotiated out of office leases where a management fee is already charged.

Amortization of capital expenditures

How a lease lets a capital item into the expense pool a piece at a time — cost divided by useful life, sometimes with interest — instead of all in the year it was paid. Usually allowed only for capital required by new law or that reduces operating costs. A $180,000 roof over twenty years is $9,000 a year, if the lease allows it at all.

Anchor tenant

A large tenant, usually retail, that draws traffic to the property and negotiates its own terms — often a fixed CAM contribution or none, and often left out of the denominator used for everyone else's share.

Audit right

The lease clause that lets a tenant examine the books behind a reconciliation. It normally sets a notice window, says who can do the audit and how they're paid, and shifts the audit cost to the landlord if the overcharge passes a threshold, commonly 3–5%.

B

Base rent

The rent for the premises itself, before any share of operating expenses, taxes or insurance. Escalations are usually escalations of base rent.

Base year

A lease structure where the landlord absorbs operating expenses up to their level in a stated year and the tenant pays its share of the increase above it. The base year has to be computed the same way as every later year — same exclusions, same gross-up — or the tenant overpays every year of the term.

Base-year reset

Replacing the original base year with a more recent one on renewal, so the landlord again absorbs expenses up to the new level. What this does to an existing cap is rarely stated and should be settled in the amendment.

BOMA measurement standard

The Building Owners and Managers Association's standards for measuring floor area; the office standard (ANSI/BOMA Z65.1) is the one most leases name. It sets the rentable area behind every share, so remeasuring under a different edition changes every share in the building.

C

CAM

Common area maintenance: the cost of running the parts of a property tenants share — parking, landscaping, lobbies, lighting, security, management — recovered from tenants in proportion to their space. Often used loosely for the whole operating expense recovery, taxes and insurance included.

CAM cap

A limit on how much a tenant's share of controllable expenses can grow from one year to the next or from the base year. The percentage alone tells you little: measured from the base year or the prior year, compounding or not, with or without carry-forward, the same 5% gives different ceilings — $57,500, $57,881 or $61,425 on the same tenant.

CAM estimate

The monthly amount a tenant pays during the year toward its share of operating expenses, trued up against the actual share after year end. Estimates are income to the landlord and should be booked that way, never netted against expenses.

CAM reconciliation

The annual comparison of what tenants paid in estimates against their actual share of the year's operating expenses, with the difference billed or credited. The subtraction is easy; the work is deciding what's recoverable, grossing up, allocating, and applying each lease's base year and cap in the right order.

Capital expenditure

Spending that creates a new asset, extends the life of an existing one or materially increases its value — a roof replacement, a parking lot rebuild, a new HVAC unit — as opposed to a repair. Excluded from the expense pool under nearly every lease unless amortized in.

Certificate of insurance

A one-page summary from an insurer or broker showing a tenant's or vendor's coverage: policy types, limits, dates, additional insureds and endorsements. It's evidence, not the policy, and it expires with the policy period.

Chart of accounts

The list of accounts a set of books posts to. For expense recovery, each operating expense account should sit wholly on one side of the recoverable line, so the pool can be pulled as a range of accounts rather than sorted transaction by transaction.

Class and location tracking

The general-ledger features that tag a transaction with a segment of the business — for a property owner, the property or building — so a profit and loss report can be filtered to one of them. In QuickBooks Online software, as of October 2026, Intuit's plan pages place both on the Plus and Advanced subscriptions.

Common area

The parts of a property not leased to any one tenant: lobbies, corridors, restrooms, elevators, parking, landscaping, loading areas. Running them is what CAM pays for.

Compounding cap

A cap where each year's ceiling grows by the cap percentage of last year's ceiling, so increases build on each other. Identical to a simple cap in year one, $125 apart in year two on a $50,000 base at 5%, and $1,314 a year apart by year five.

Controllable expenses

The operating expenses a landlord can manage by contract and procurement — management fees, landscaping, janitorial, repairs, often security. Caps apply to these. The lease defines the term, usually by listing what's uncontrollable and calling the rest controllable.

Cost-shifting threshold

The overcharge percentage above which the landlord, not the tenant, pays for a CAM audit — commonly 3–5%. On a $12,000 recoverable, 5% is $600, which is why audit findings tend to land right around it.

CPI escalation

A rent increase tied to a published consumer price index instead of a fixed percentage, often with a floor or a cap. The lease names the index and the comparison months; use exactly those.

Cumulative cap

A cap where room the landlord didn't use in a slow year carries forward and raises the ceiling in a later one. The word is used inconsistently — some leases and courts read it as compounding — and leases rarely say whether unused room carries as percentage points or dollars.

D

Denominator

The area a tenant's rentable square feet is divided by to get its share. Usually the building's total rentable area, so vacant space is the landlord's share; sometimes occupied area, or a stated figure that leaves out anchors. It should be the same number on every tenant's statement.

Derivation

The chain of figures and decisions behind a number on a statement: the ledger total, the exclusions, the gross-up by account, the share and denominator, the base year, the cap history, the estimates billed. A statement that shows it answers an audit request by pointing at a page the tenant already has.

E

Escalation

A scheduled increase in base rent during the term — a fixed percentage, a fixed dollar amount, steps on set dates, or an index adjustment. $10,000 a month at 3% becomes $10,300, and next year's 3% is normally taken on $10,300.

Exclusions

The costs a lease keeps out of the recoverable pool even if the general definition would catch them: capital improvements, leasing commissions, tenant improvements, the owner's legal and financing costs, depreciation, ground rent, anything reimbursed elsewhere. A negotiated office lease often lists thirty or more.

Expense pool

The total of a period's recoverable operating expenses for a property, after exclusions and gross-up, from which each tenant's share is computed. Harbor Point Plaza's 2026 pool is $1,000,000 after exclusions and $1,075,000 after gross-up.

Expense stop

A lease structure where the landlord absorbs operating expenses up to a stated amount, usually per rentable square foot, and the tenant pays its share above it. Unlike a base year, the stop is a negotiated figure that may never have matched a real year.

F

Fixed expenses

Operating expenses that don't change with occupancy — insurance, taxes, landscaping, security, elevator contracts, most repairs. They are never grossed up. At Harbor Point Plaza they are $600,000 of a $1,000,000 pool.

Full-service gross lease

A gross lease where the rent includes operating expenses, taxes, insurance, utilities and often janitorial, so the tenant writes one check. Most still carry a base year or expense stop, so the tenant pays increases above that level.

G

Gross lease

A lease where the stated rent covers the landlord's operating costs, as opposed to a net lease where the tenant pays them separately. In practice it's a spectrum — full-service, modified gross, triple net — and the specific clause says what's recovered.

Gross-up

Restating the expenses that vary with occupancy as if the building were fuller — usually 95% or 100% — before allocating them. The arithmetic is variable expense × (stated occupancy ÷ actual occupancy): $400,000 at 80% occupancy, grossed up to 95%, is $475,000. Applies only to variable expenses, and to the base year on the same basis.

H

Holdover

A tenant staying in the premises after the lease term ends without a renewal. Most leases charge holdover rent at a premium to the last base rent, and the tenant's share of operating expenses continues.

L

Lease abstract

A structured summary of the lease terms that drive money and dates: parties, area, term and options, rent and escalations, the recovery structure, share and denominator, caps, gross-up, exclusions, insurance requirements and notice addresses. Fields to compute from, not paragraphs to re-read.

Lease administration

The ongoing work of tracking what a portfolio's leases say and acting on it when the dates arrive: rent and escalation schedules, options, insurance compliance, recovery terms, documents and amendments. It's what feeds the reconciliation.

Load factor

The ratio that turns a tenant's usable area into its rentable area by adding its share of the common areas. A 15% load factor turns 6,957 usable square feet into 8,000 rentable. Rent and shares are computed on rentable area.

M

Management fee

The fee paid to the property manager, recoverable under most leases up to a stated limit — a percentage of gross receipts or of operating expenses. What gets argued: the base it's computed on, whether a fee to the owner's own affiliate is recoverable above market, and whether it's grossed up.

Modified gross lease

A lease between gross and net where the rent covers some operating costs and the tenant pays others — commonly rent includes taxes and insurance while the tenant pays its own utilities and janitorial. There's no standard split; the lease lists it.

N

NNN

A triple net lease: the tenant pays base rent plus its share of taxes, insurance and common area maintenance, so the landlord's rent is net of operating costs. Single-net and double-net versions recover fewer of the three.

Non-cumulative cap

A cap that tests each year on its own — any room left under the ceiling is gone. With a cap measured from the prior year's actual, a slow year permanently lowers the base for every later year.

O

Occupancy

How much of a building's rentable area is leased and occupied, used in the gross-up. The fair figure is the monthly weighted average for the year, not the position on December 31, taken from a signed rent roll rather than the leasing team's count.

Operating expenses

The costs of operating, maintaining, repairing and managing a property — utilities, janitorial, landscaping, security, repairs, insurance, taxes, management — as the lease defines them. The exclusions list then takes out what the landlord bears alone.

P

Percentage rent

Rent in a retail lease computed as a percentage of the tenant's sales above a stated breakpoint, paid on top of base rent and reconciled on its own cycle.

R

Recapture

A landlord's right to recover in a later year what a cap stopped it billing in an earlier one, when actuals later fall below the ceiling. Separate from carry-forward; a lease can grant either, both or neither.

Record retention

How long after a statement the lease requires the landlord to keep the books behind it available for audit — commonly two or three years, and in practice as long as a base year or cap history is still in use.

Recoverable expenses

The operating expenses a lease lets the landlord pass through to tenants. Maintenance, cleaning, common-area utilities, landscaping, security, insurance, taxes and a management fee are recoverable almost everywhere; capital, leasing costs and the owner's financing and overhead are not.

Recovery group

A subset of the expense pool shared by a subset of tenants — the parking lot shared by retail tenants but not office tenants, or one building's lobby costs. Each group has its own total, denominator and tenants.

Rent roll

The schedule of every lease in a property with its tenant, premises, area, term, rent and current charges. For the reconciliation it's the source of each tenant's area, occupancy by month, and the estimates actually billed.

Rentable square feet

The area a tenant pays for: its usable area plus its share of the common areas, added by the load factor. Rent, the pro-rata share and the denominator are all computed on it, so a remeasurement changes all three.

Repair versus replacement

The classification question at the edge of the exclusions list: patching and restoring is a repair and goes in the pool; replacing the whole asset or extending its life is capital and comes out. Roofs, parking lots and HVAC units are argued most.

S

Sealed period

A reconciliation that has been finalized and frozen with its inputs — the pool, exclusions, gross-up, shares, base years and cap history exactly as they were when the statements went out. Reopening it changes every cumulative cap after it, so a correction is a re-run, not an edit.

T

Tenant improvement allowance

Money the landlord contributes toward fitting out a tenant's space, stated per square foot or as a sum. A cost of leasing the space, not operating the property, and excluded from the expense pool.

True-up

The difference between a tenant's actual share of the year's expenses and the estimates it paid, billed if positive and credited if negative. $12,000 recoverable less $10,800 of estimates is a $1,200 true-up.

U

Uncontrollable expenses

Operating expenses set by outside parties — taxes, insurance premiums, utility rates, and under many leases snow removal and security — which a cap on controllable expenses leaves alone.

V

Vacancy

Rentable area with no tenant, and the share of expenses that goes with it. When shares are computed on total rentable area, the vacant share is the landlord's: 20,000 of 100,000 square feet empty means $215,000 of a $1,075,000 pool is absorbed.

Variable expenses

Operating expenses that rise and fall with occupancy — janitorial, trash, the tenant-driven part of utilities. They're the only expenses a gross-up applies to. At Harbor Point Plaza they are $400,000 of a $1,000,000 pool.

W

Waiver of subrogation

An endorsement where an insurer gives up its right to go after the other party to the lease for a loss it has paid. Leases usually require mutual waivers, and a certificate that doesn't show the endorsement is a compliance gap.

Write-back

Recording the result of a reconciliation in the accounting system — the true-up as an invoice or credit per tenant, in the income account where the estimates already sit — so the billing lands in the books without being re-keyed.

Y

Year-over-year cap

A cap where each year's ceiling is last year's actual increased by the cap percentage. Barely a limit on cumulative growth: a year under the ceiling resets the base downward, and a spike is capped only against last year. On a $50,000 base at 5% it gives a 2026 ceiling of $61,425 against $57,500 for a simple cap.