Commercial property management company charges 5% of monthly gross income as its fee, which includes CAM income. The tenant's lease is NNN and property management fees are considered a CAM charge. If the tenant is paying a monthly CAM fee (which includes property management fees) and the property management company is charging 5% of gross income (which includes CAM), is the tenant being double charged? Even if so, is this standard?
For commercial retail properties 5% of gross rents is on the higher side of fees. Those are usually smaller centers. The larger you go up in center size the PM fee can come down to 3% in some cases.
CAM ( common area maintenance fees ) typically cover property taxes, landlord insurance, PM fees, maintenance to the building and service contracts.
Some tenants instead of a NNN leases have NN lease or a gross lease. What a tenants responsibility is with CAM and percentages will vary based on what is in the lease.
Some have CAM STOPS each year where the tenant pays only a certain amount and after that the landlord pays it. Some have a clause where they only pay a percentage of CAM for the space they occupy. Again it's all about the lease and what is in it.
Are you currently evaluating a property to buy, already own it, or are you a tenant with a business in a center?
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing