lease comparison
How do CAM charges change a lease comparison?
How do CAM charges change a lease comparison?
CAM can flip a net-versus-gross rank. Put the extra on the net path before you name a winner.
This page belongs to a validation / pilot concept. It is not generally available. Payment is not collected.
Questions this page also answers
What does this page answer?
CAM can flip a net-versus-gross rank. Put the extra on the net path before you name a winner.
What should sit beside it?
The nearby owner page and one worked walk.
What is not answered here?
A legal read and a location vote.
What is the next step?
Open the related compare or model page and keep the same rate.
Plain-language definition
CAM is shared building cost.
A comparison that skips it is a sticker contest.
Caps, exclusions, and true-ups change later years.
Gross leases may already include the extra.
Say the basis out loud.
This page sits under Lease comparison.
Need the next step? Open What is CAM?.
See Gross vs net when you want the nearby walk.
Open CAM in NPV if this page is not the last step.
Investopedia defines net present value as later cash brought back to today. See Investopedia on NPV.
Why it matters
A $18 net can lose to a $28 gross after extras.
Uncapped CAM is a risk, not a rounding error.
Clients remember the surprise more than the win.
The extra belongs on the same sheet as rent.
How it works
- List who pays CAM.
- Write year-one estimates.
- Honor caps.
- Keep true-up language beside the number.
- Discount the extra with rent.
Formula in words. Compared cash = rent + CAM extras − credits.
| Input | Meaning |
|---|---|
| Start rent | First-year rent before extras |
| Extras | CAM, tax, or insurance the tenant still pays |
| Credits | Free rent or build-out money |
| Term | How many years the cash list runs |
| Discount rate | How hard later cash is shrunk |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
| Metric | Path A | Path B |
|---|---|---|
| Start rent | $33,000 | $30,690 |
| Year-1 extras | $16,000 | $17,120 |
| Year-1 credit | $4,000 | $2,200 |
| Sample NPV | $366,251 | $358,933 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $33,000 | $16,000 | $4,000 | $45,000 | $41,667 |
| Year 2 | $33,990 | $16,480 | $0 | $50,470 | $43,270 |
| Year 3 | $35,010 | $16,974 | $0 | $51,984 | $41,267 |
| Year 4 | $36,060 | $17,484 | $0 | $53,544 | $39,356 |
| Year 5 | $37,142 | $18,008 | $0 | $55,150 | $37,534 |
| Year 6 | $38,256 | $18,548 | $0 | $56,804 | $35,796 |
| Year 7 | $39,404 | $19,104 | $0 | $58,508 | $34,139 |
| Year 8 | $40,586 | $19,677 | $0 | $60,263 | $32,558 |
| Year 9 | $41,804 | $20,267 | $0 | $62,071 | $31,051 |
| Year 10 | $43,058 | $20,875 | $0 | $63,933 | $29,613 |
| Sample NPV | — | — | — | — | $366,251 |
Sample NPV for CAM compare sample is about $366,251. A second path lands near $358,933.
Year 1 of CAM compare sample has rent of $33,000.
Shared building cost is $16,000.
A credit of $4,000 lowers the cash you pay that year.
Cash out this year is about $45,000. Year one carries the CAM compare sample credit.
Later cash gets a shrink for time. At 8 percent, year 1 is worth about $41,667 today.
Next, year 2 rent is $33,990.
Assumptions
- The CAM compare sample uses one visible 8 percent rate.
- Credits hit in year one unless the page says otherwise.
- Both options share the same extra basis.
- No percentage rent sits in this teaching walk.
Edge cases
A mid-year start needs a stub period, not a fake full year.
A credit that pays later must move to that later year.
A cap on extras changes the later risk, not the first sticker.
Common mistakes
- Comparing stickers.
- Treating an estimate as a cap.
- Ignoring management fees inside CAM.
- Dropping later true-ups.
Decision implications
CAM can flip a net-versus-gross rank. Put the extra on the net path before you name a winner.
If the gap is thin, show a second rate before anyone picks.
If one path wins only from a mistimed credit, rebuild the list.
This page answers one question. Nearby pages cover the next step.
See What is CAM? when you need that next step. Open Gross vs net for the nearby walk. Use CAM in NPV if you want a second path.
Limits
- The number does not score daylight, transit, or floor plate.
- The number does not replace a legal read.
- Do not let one metric pick a space the team cannot use.
- Do not use this page as a clone of a nearby question.
U.S. BLS describes how brokers advise clients on property deals. See BLS broker occupation data.
Next step
This site is a validation / pilot concept. It is not generally available. Payment is not collected.
Ready for a bounded next step? Request Pilot Access or see how it works and compare commercial leases.
How do you compare two commercial lease proposals? · How do free rent periods and tenant improvement allowances affect NPV? · How do you compare leases with different term lengths? · How do you normalize commercial lease proposals? · How do you compare a gross lease and a net lease? · What belongs in a commercial lease comparison? · How do tenant-rep brokers compare lease offers? · How do CFOs review commercial lease comparisons?
Trusted sources
These are public references. They are not endorsements and not client results.