What advice do you have from a commercial property management perspective for raising CAM fees if the rate charged has remained stagnant for over 12 years and there is now a need to increase the rate by over 50%.
what is a good way to approach tenants?
Answer As you might imagine, particularly in this market when tenants' businesses are suffering, a 50% CAM increase isn't going to be received favorably. A lot will depend on what is causing the CAM to increase so dramatically and rapidly. Normally, when we do our budgets (on which the estimated CAM charges are based), we'll include annual reserves for the big ticket items so that we don't hit the tenants hard in any one year. If you haven't done that, one option would be to spread the cost to reimburse for whatever is causing the CAM to increase over the course of the next several years.
Other than that, you'll need to do your best to try and explain the reason for the increase, which hopefully includes that it was for something that will benefit the property, and thus the tenants.
