DFW Industrial CAM: Why the Simplest Leases Create the Biggest Disputes

The DFW Industrial Landscape

Dallas-Fort Worth is the largest industrial market in the U.S. by total inventory, with over 1 billion square feet of warehouse, distribution, and manufacturing space. Between 2020 and 2025, approximately 180 million SF of new industrial construction delivered.

This growth means a large number of buildings running first-year or early-year reconciliation, with base years that were set during a period of rapid cost escalation. It also means county assessors have fresh comparable sales data that drives assessments higher.

For property controllers, DFW industrial CAM appears straightforward: NNN lease, pass through taxes, insurance, and maintenance, collect the money. In practice, three issues create complexity.

Issue 1: Tax Assessment Acceleration

Tarrant County and Dallas County reappraise annually. Industrial transaction volume has been high, giving assessors strong comparable sales data to justify higher values.

On a 500,000 SF distribution center with a $2.4M tax bill, an 11% increase adds $264,000 to CAM pass-throughs. For a single-tenant NNN building, that's a direct hit to the tenant's operating budget.

The protest question. DFW tenants are increasingly asking landlords to protest assessments. Some leases require it. Others give the tenant the right to protest directly (with landlord cooperation). A successful protest saving 5-8% on a $2.6M assessment is $130,000-$208,000 — split proportionally among tenants in a multi-tenant building.

If you're not protesting rising industrial assessments in DFW, you're leaving money on the table for your tenants and creating a potential audit finding.

Issue 2: Yard and Truck Court Allocation

Multi-tenant industrial buildings share common areas: truck courts, fire lanes, shared parking, detention ponds, and perimeter fencing. The allocation of maintenance costs for these areas isn't always clear.

The allocation debate:

A 400,000 SF multi-tenant industrial building has three tenants:

• Tenant A: 200,000 SF (50%), heavy truck traffic, uses truck court daily
• Tenant B: 120,000 SF (30%), light traffic, minimal truck court use
• Tenant C: 80,000 SF (20%), office/showroom, no truck court use

Annual truck court maintenance: $85,000 (concrete repair, striping, sweeping, snow removal)

By pro-rata share: Tenant A pays $42,500, Tenant B pays $25,500, Tenant C pays $17,000

By usage: Tenant A generates 80% of truck traffic, Tenant B generates 18%, Tenant C generates 2%

Tenant C's lease says they pay "Tenant's Proportionate Share of Common Area Maintenance." Paying $17,000 for truck court maintenance they don't use is technically correct by pro-rata share but functionally unfair.

Most industrial leases in DFW don't distinguish between use-based and area-based allocation for specific cost categories. The pro-rata share applies to all common area costs. But sophisticated industrial tenants are starting to push back during lease negotiations, requesting exclusion of truck court maintenance or allocation based on dock doors rather than square footage.

Issue 3: Insurance Volatility

DFW sits in the center of Hail Alley. Industrial buildings with large, flat roofs are particularly vulnerable. Insurance claims from hail events in 2023 and 2024 drove premium increases of 15-30% for many DFW industrial properties.

For NNN tenants, insurance is a direct pass-through. A $180,000 premium jumping to $234,000 (30% increase) adds $54,000 to CAM — and tenants want to know why.

The communication challenge: Explain the premium increase proactively. Include the insurance renewal declaration showing the new premium, the broker's explanation of market conditions, and the prior year premium for comparison. Tenants who understand the increase accept it. Tenants who see a 30% jump without explanation call their auditor.

The deductible question: When a hail claim occurs, who pays the deductible? Most industrial leases pass through insurance premiums but are silent on deductibles. A $50,000 deductible on a hail claim is a significant expense. Some landlords include it in CAM; others absorb it. Check your lease language before making the call.

Controller Recommendations for DFW Industrial

1. Protest every assessment increase above 5%. The filing cost is minimal, and DFW industrial properties have strong protest success rates due to the volume of comparable data available.

2. Document truck court allocation methodology. Whether you use pro-rata share or another method, document it in Year 1 and apply it consistently. Changing methods creates audit findings.

3. Communicate insurance increases before year-end. A mid-year letter to tenants explaining the premium renewal and its CAM impact prevents surprise at statement time.

4. Watch supplemental tax bills. New construction and major improvements trigger supplemental assessments that arrive separately from the regular tax bill. These are recoverable through CAM but only if you include them in the reconciliation.

5. Run CapVeri on first-year reconciliations. New buildings with new leases have the highest error rate — base years haven't been established, systems haven't been configured, and the controller is reconciling for the first time. Validation catches setup errors early.

Related Resources

• CAM Reconciliation for Industrial — Industrial-specific CAM guide
• Property Tax Protest & CAM Interaction — Protest procedure and refund distribution
• Insurance Expense Pass-Throughs — Premium allocation methodology
• 2026 Property Tax Increases — National assessment trends