How to Reconcile CAM Charges: A Step-by-Step Guide

Reconciling CAM charges comes down to one question: what did the property actually cost to operate, and what is each tenant's fair share of it? Here is the process landlords and property managers follow.

Before you start: gather your inputs

• The general ledger of actual operating expenses for the year
• Each lease’s CAM clause: pro-rata share, caps, exclusions, and base year
• The building’s total and occupied leasable square footage
• What each tenant already paid in monthly CAM estimates

The step-by-step process

1. 1Total your actual CAM expenses for the year into clearly defined expense pools.
2. 2Remove exclusions and capital expenditures that the lease says tenants don’t pay for.
3. 3Apply the occupancy gross-up so variable costs reflect a fully-occupied building.
4. 4Apply any per-lease caps that limit how much a tenant’s CAM can increase year over year.
5. 5Calculate each tenant’s pro-rata share of the adjusted pool.
6. 6Subtract the estimates the tenant already paid during the year.
7. 7Issue a reconciliation statement billing the shortfall or crediting the overage.

Worked example

A tenant occupies 12,000 of 100,000 leasable sq ft (12%). Adjusted CAM after exclusions and gross-up is $250,000, so the tenant's share is $30,000. They paid $27,600 in estimates, so the true-up bills the $2,400 difference—with a line-item statement showing every pool that drove the number.

The gross-up, briefly

If a building is only 80% occupied, variable costs like janitorial are lower—but the lease usually lets you “gross up” those variable expenses to a fully-occupied level so paying tenants aren't penalized for vacancies. Applying it correctly (only to variable costs) is one of the most error-prone steps, and a big reason to let software handle the math.