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CAM Reconciliation Season 2026: The Survival Guide

By Angel Campa·Founder, CapVeri5 min read

It's Q1. The GL is closed. The tenants are waiting. Your controllers are already behind.

Welcome to CAM reconciliation season.

This guide covers what's different about 2026, the timeline that still applies, the errors that will slow you down, and how to get statements out before March 31 without your team working through April.

The Standard Timeline

Most calendar-year commercial leases require reconciliation statements within 90–120 days of December 31. That means:

  • 90-day deadline: March 31, 2026
  • 120-day deadline: April 29, 2026
  • California SB 1103: 30-day response window for Qualified Commercial Tenant requests (ongoing)

If you're reading this in mid-March and haven't started reconciliation for your full portfolio, you're in trouble. But here's what to prioritize:

Priority 1: Any tenant that has already sent an audit request or dispute. They're watching the clock.

Priority 2: California buildings with tenants who qualify under SB 1103. These carry treble-damage liability for non-response.

Priority 3: Largest-balance tenants — those with the most significant estimated vs. actual variance. These are the likeliest to dispute.

Priority 4: Everything else.

What's Different in 2026

Insurance Premium Increases

Insurance premiums for commercial real estate spiked 15–25% in 2024 and remain elevated in 2025–2026. For many buildings, insurance is now the single largest year-over-year CAM expense increase. Tenants who received 2025 CAM estimates based on 2023 premiums are going to see significant true-up amounts and will scrutinize your documentation.

What this means: Be prepared to show insurance premium invoices as backup for any building where insurance increased >10% year-over-year. Tenants won't take the number on faith.

Elevated Office Vacancy

Office vacancy rates remain elevated in most major markets — many buildings in the 75–85% occupancy range. This makes gross-up calculations more consequential: the difference between 80% and 85% occupancy translates directly into how much variable expenses are grossed up and charged to remaining tenants.

What this means: Gross-up documentation needs to be explicit. Show the occupancy data, the method (weighted average vs. snapshot), and the specific threshold from each tenant's lease. Tenants in partially vacant buildings are more likely to challenge gross-up calculations.

SB 1103 Year 2

California Senate Bill 1103 took effect January 1, 2025. The first reconciliation cycle under SB 1103 (for 2024 expenses) was Q1 2025. Many California landlords were caught off guard by the documentation requirements.

Year 2 means:

  • Tenants who received unsatisfactory responses in 2025 are better prepared with outside help in 2026
  • The 30-day response clock is strict — document every tenant contact
  • SB 1103-compliant exports must cover an 18-month lookback period

If you don't have SB 1103-compliant documentation format already, this is the most important thing to set up before Q1 ends.

More Tenants with Outside Auditors

Tenant-side audit firms (Tango Analytics, Visual Lease, LeaseQuery) have seen increased business as tenants discovered billing errors in 2024 and 2025 reconciliations. Expect more formal audit requests in 2026, particularly for buildings where large tenants have multi-year leases and CAM caps.

The 5 Errors That Will Delay Your Q1

1. Gross-Up Configuration Not Matching Current Leases

This is #1 every year. Between lease amendments, renewals, and original configuration errors inherited from predecessors, at least one building in any mid-size portfolio has a gross-up threshold that doesn't match tenant leases.

How to spot it fast: Pull every lease with a gross-up clause. Compare threshold to your ERP's recovery pool configuration. Any mismatch is an error.

2. GL Accounts Not Mapped to Recovery Pools

If any new GL accounts were created during 2025 (new vendors, reclassified expenses), verify they're mapped to the appropriate recovery pools. The expense is in the GL but won't flow to tenants unless it's mapped.

How to spot it fast: Compare total operating expenses in the GL to total expenses in recovery pool calculations. Any difference = unmapped accounts.

3. Denominator Not Updated

Any building that had tenant move-ins, move-outs, or lease expansions during 2025 needs a denominator review. The pro-rata denominator must reflect the current state of each tenant's pro-rata share definition.

How to spot it fast: List all tenancy changes in 2025. Verify that the denominator in your ERP for each affected tenant has been updated.

4. Cap Configuration After Renewals

Any tenant who renewed in 2024 or 2025 may have a new base year and updated cap terms. These need to be reflected in your ERP before the 2025 reconciliation runs.

How to spot it fast: Pull all leases renewed in the last 24 months. Verify that base year amounts and cap types in your ERP match the renewal terms.

5. Missing SB 1103 Documentation

For California buildings, verify that every reconciliation has the required itemized CAM ledger documentation. This is both a compliance requirement and a defense requirement.

How to spot it fast: If you can't produce a 30-day response to a Qualified Commercial Tenant request for any California building, you're not compliant.

The Bottleneck Is Calculation, Not Review

Most teams spend 80% of their Q1 CAM time on calculation work — pulling data, building spreadsheets, applying gross-up formulas, checking caps, comparing to estimates. That's the work that takes 6–10 weeks.

The review work — is this statement correct? does it match the lease? — should take 2–4 weeks. It just gets buried under the calculation work.

The fastest way to compress Q1 reconciliation time isn't to work harder on calculations — it's to eliminate the calculation work by using independent verification software that recalculates from the ERP export. Controllers review and approve instead of calculate and build.

That shift moves a 6–10 week process to a 2–4 week review process for the same portfolio.

What to Do Right Now

  1. Inventory your portfolio by risk: Which buildings have SB 1103 exposure? Which have lease renewals that may not be reflected in the ERP? Which had the most tenancy changes in 2025?

  2. Check gross-up configurations for your top 10 buildings against current lease terms. If you find errors in 10%, they probably exist across the full portfolio.

  3. Identify buildings that are behind schedule and figure out why. Is it missing data? Lease term questions? Staff capacity?

  4. Prioritize dispute-ready documentation over speed. A statement that goes out March 30 and gets disputed in April costs more than a statement that goes out April 10 and holds up.

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