Reading the Cam in a Lexington Office Lease

The common area maintenance clause in a Lexington office lease is where the landlord passes the operating cost of the building to the tenant, and where the tenant most often signs without reading. The cam is not a fixed number. It is a reconciliation, and the reconciliation runs in the landlord's favor when the lease lets it.

We read the cam definition before we read the rent. A cam that includes capital replacement, management fee, and a contingency reserve will grow faster than inflation, and a tenant who signs a five year lease with a cam cap will find the cap is the only thing holding the line. A cam without a cap is a blank check.

The renewal mechanic is the second hiding place. A renewal at the lesser of fair market value or the prior rate sounds favorable, but the landlord writes the fair market value, and the tenant's leverage is gone on the day the notice is delivered. We underwrite the cam and the renewal together, because they are the same cost over the term.