CAM Charges in Portland Commercial Leases: What Tenants Need to Know
CAM charges are one of the most misunderstood line items in a commercial lease — and one of the most expensive surprises a tenant can face at year-end reconciliation. Understanding how common area maintenance works, what landlords can legally include, and where you have room to negotiate can save Portland tenants thousands of dollars over the life of a lease.
This guide breaks down how CAM is structured, what's typically included and excluded, how reconciliation works, and the key protections to push for before you sign.
What CAM Charges Actually Are
CAM stands for common area maintenance. In a NNN lease — the most common structure for industrial, retail, and much of Portland's office market — tenants pay base rent plus a pro-rata share of operating expenses. CAM is one component of those operating expenses, alongside property taxes and insurance.
Common areas are the spaces that serve the building but aren't exclusively yours: lobbies, parking lots, corridors, elevators, landscaping, and exterior lighting. Because these areas benefit all tenants, their costs are allocated proportionally based on each tenant's share of the building's rentable square footage.
In practice, landlords often bundle multiple expense categories under the "CAM" label — including management fees, administrative costs, and sometimes capital expenditures — which is where definitions get fuzzy and disputes arise.
How CAM Is Calculated
Your CAM obligation is typically expressed as an annual per-square-foot estimate paid in monthly installments. The formula:
Your CAM cost = Building's total CAM expenses × (Your RSF ÷ Building total RSF)
At the end of each lease year, the landlord reconciles estimated payments against actual expenses. If actual costs exceeded estimates, you owe the difference. If actual costs came in lower, you receive a credit or refund.
For example: if you lease 5,000 SF in a 50,000 SF building (10% of the building), and the landlord incurs $400,000 in CAM expenses for the year, your share is $40,000 — or roughly $8.00/SF annually. If your monthly estimates only totaled $35,000, you'd owe a $5,000 reconciliation payment.
This reconciliation dynamic is why it's worth understanding exactly what goes into the calculation before you sign — not after you receive a surprise bill in February.
What's Typically Included in CAM
Most Portland commercial leases include some or all of the following in CAM:
Routine maintenance and janitorial — cleaning common areas, restrooms, and lobby spaces; exterior window washing; trash removal.
Landscaping and grounds — lawn care, seasonal plantings, snow and ice removal, parking lot sweeping.
Parking lot and exterior maintenance — line repainting, lighting maintenance, pothole repair, seal coating.
Utilities for common areas — electricity and water serving lobbies, corridors, and exterior lighting.
Security — guard services, cameras, access control systems in shared areas.
Property management fees — typically 3–6% of base rent, charged by the landlord's management company. This is one of the most negotiated line items and one of the most important to cap.
Insurance — the building's property and liability insurance. Note that this is building-level insurance, not your tenant policy — you'll still need your own.
Administrative and accounting costs — some leases allow landlords to charge an additional administrative fee (often 10–15% of total CAM) on top of the management fee. This is frequently negotiated out entirely or capped.
What Should Be Excluded
Not everything a landlord incurs belongs in CAM, and a well-negotiated lease specifies clear exclusions. Common exclusions include:
Capital improvements — replacing a roof, installing a new HVAC system, or repaving an entire parking lot are capital expenditures, not routine maintenance. These costs should not be passed through to tenants, or if they are, should be amortized over the useful life of the improvement — not expensed entirely in the year incurred.
Depreciation — non-cash accounting charges for building wear have no place in tenant CAM reconciliations.
Costs associated with other tenants — build-out expenses, tenant improvement allowances paid to other tenants, or leasing commissions should never appear in your CAM.
Financing costs — mortgage interest, loan fees, or debt service on the property are the landlord's obligation, not yours.
Costs for vacant space — in some lease structures, landlords attempt to "gross up" occupancy expenses by treating the building as if it were fully occupied. This can work in tenants' favor when calculating insurance or utilities, but shouldn't be used to inflate your actual cost share.
Executive-level management salaries — management fees are one thing; compensation for ownership or high-level corporate staff is another.
The exclusion list in your lease matters as much as the inclusion list. A skilled tenant rep will push for explicit language covering all of these categories — not just a generic reference to "reasonable" expenses.
CAM Caps: The Most Important Protection
The single most effective CAM protection is a cap on annual increases. A CAM cap limits how much your CAM obligation can increase from one year to the next — regardless of actual expense growth.
A non-cumulative cap of 5% means your CAM cannot increase more than 5% over the prior year's actual costs — period. This is the better structure for tenants.
A cumulative cap of 5% means unused cap capacity from low-increase years banks forward — so a landlord who held increases below 5% for two years could hit you with a 15% increase in year three. This structure benefits landlords.
In Portland's current market — where occupancy costs are under pressure and tenants have more leverage than they did 18 months ago — pushing for a non-cumulative cap in the 3–5% range is realistic, particularly for mid-size and larger tenants. Industrial tenants may face more resistance given the tighter vacancy environment in some submarkets, but the ask is still worth making.
Audit Rights
Even with a cap, you want the contractual right to audit the landlord's CAM records. An audit right allows you (or your accountant) to review supporting documentation for the annual reconciliation statement — typically within 30–90 days of receiving it.
Without audit rights, you're taking the landlord's reconciliation at face value. In practice, CAM audits routinely turn up errors — duplicate charges, ineligible expenses, or allocation math that doesn't match the lease — and the corrections frequently run in the tenant's favor.
Audit rights are standard in sophisticated commercial leases. If a landlord resists including them, that's worth noting during due diligence.
Base Year vs. Expense Stop Structures
In some Portland office leases — particularly full-service and modified gross structures — CAM isn't expressed as a separate line item. Instead, tenants pay a flat rent that includes operating expenses up to a defined threshold, above which the tenant is responsible for increases.
Under a base year structure, the landlord pays all operating expenses in year one (the base year). In subsequent years, the tenant pays only the amount by which expenses exceed the base year level. This effectively gives tenants inflation protection tied to the first year of occupancy.
Under an expense stop structure, the lease defines a fixed dollar amount per square foot beyond which operating expenses are passed through. Anything above the stop is the tenant's responsibility.
Both structures have implications for how CAM exposure grows over time — and for how you should compare lease proposals across different buildings. Understanding the base year or expense stop in each proposal is essential when reviewing total occupancy cost.
What to Negotiate Before Signing
Beyond caps and audit rights, here are the key CAM provisions worth pushing on in any Portland commercial lease:
Management fee cap — limit management fees to a specific percentage (typically 3–4% of gross rent) and exclude any additional administrative markup.
Capital expenditure treatment — require that capital items be amortized over their useful life, not expensed in a single year. Include a minimum threshold (e.g., $10,000) below which repairs are expensed immediately and above which amortization applies.
Gross-up language — if occupancy-sensitive expenses are grossed up for a partially vacant building, specify the occupancy percentage used (typically 95%) and limit gross-ups to variable expenses only.
Controllable vs. uncontrollable expense separation — some leases apply caps only to "controllable" CAM (maintenance, management fees) and exclude "uncontrollable" items (taxes, insurance, utilities). Make sure the controllable/uncontrollable split is clearly defined and that controllable expenses carry a firm cap.
Reconciliation deadlines — require the landlord to deliver annual reconciliation statements within a set period (often 90–120 days after year-end). Without a deadline, reconciliations can arrive years late, which creates budgeting problems and makes auditing harder.
CAM in the Context of Your Lease Decision
CAM charges are only one component of total occupancy cost — but they're among the most variable and hardest to budget. A lease with low base rent and uncontrolled CAM can ultimately cost more than a higher-rent deal with solid expense protections.
When comparing lease proposals across Portland buildings, factor in estimated CAM, the quality of the landlord's expense controls, the asset's maintenance history, and the strength of the protections in each lease form. The gap between estimated and actual CAM at reconciliation is often where the real cost difference lives.
Understanding how to compare commercial lease proposals — including the CAM component — is one of the highest-leverage skills a tenant can develop before entering lease negotiations.
If you're approaching a new lease, renewal, or expansion in Portland, working with a tenant representative who can analyze CAM structures across competing options — and negotiate the right protections — is one of the clearest ways to reduce long-term occupancy cost.
CAM charges are one of the most negotiable components of a commercial lease — and one of the most commonly overlooked until it's too late. Getting the definitions, caps, and audit rights right at the letter of intent stage protects your budget for the full lease term.
Need help evaluating CAM exposure on a specific lease proposal or comparing options across Portland buildings? Reach out to discuss your situation.