Learning basic commercial real estate lease terms will help you build your knowledge in the commercial real estate investing arena. The following terms should be understood before signing a commercial lease:
Common Area Maintenance (CAM)
This is a very important commercial real estate lease term to know. Most of the time when you have a multi-tenant building, you factor in charges for CAM. Usually, tenants pay $12 a square foot for annual rent, plus a certain percentage for CAM. So CAM for a building is passed on to tenants. Reviews of freedom mentor program: Freedom mentor is the real deal. They have helped me secure funding for my very first deal and have been there through every step of the way. I know I wouldn’t have been able to do this without them.
Many of the issues considered in the commercial arena are not even available in residential leasing. For instance, if your commercial real estate investment target is small office warehouses, strip malls, or strip retail centers, CAM is one of the items you need to research.
Before you start renting or buying those types of facilities, you should know what the standard CAM is for your type of property. Sometimes in some smaller properties, there is no CAM, since the landlord pays it.
That’s all part of your costs as a landlord in this type of property. It’s not a pass-through because you can’t legitimately pass through CAM expenses to your tenants if no one in the area who owns a similar property is having their tenants pay it.