Commercial Real Estate Investment/Reconciling CAM Charges


Kent Genovese wrote at 2014-06-10 15:12:46
The landlord is basing his current year expenses on the prior year expenses. Simply put, if his total CAM expense for 2012 is 12,000 then the LL is going to set the 2013 CAM escrow (monthly payment) at $1,000.00 per month ($12,000/12mo = $1,000.00). At the end of 2013 the LL will reconcile or true up the prior year expenses. In 2013 you would have paid a total of $12,000 towards the 2013 expenses. If the actual expenses for 2013 total $15,000, you will owe the LL $3,000 ($15,000 - $12,000 = $3,000). If the actual expenses for 2013 total $10,000, then the LL would owe you a credit of ($2,000) as you over paid CAM expenses for 2013. ($12,000 - $10,000 = $2,000). I hope this helps with your question.

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Jim Avancena, CPM


Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.


Thirty years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area (DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.

Currently my three children keep me so busy that it is difficult to participate in organizations with continuing and specific time requirements.

I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 full pages) feature story on January 13, 1993; titled "Overcharging Overhead".

BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license in Maryland and the District of Columbia.

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The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.

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Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.

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