MRI Share Type: Building-Level vs Floor-Level Allocation Explained

The Share Type field in MRI Software may be the single most consequential configuration choice in CAM setup. It is frequently set incorrectly at initial property entry and never revisited. When it's wrong, every tenant on that lease pays the wrong amount, year after year, until a lease audit surfaces the error.

What Share Type Controls

In MRI, Share Type defines the denominator of a tenant's pro-rata share fraction:

Pro-rata share = Tenant RSF / Share Type Denominator

The numerator (tenant's rentable square footage) is almost always correct. The denominator is where errors occur. MRI offers two primary Share Type configurations:

• Building: Denominator = total rentable square footage of the building
• Floor: Denominator = total rentable square footage of the specific floor

This single setting changes the denominator in every CAM calculation for that tenant. For large tenants, the financial impact can be significant.

Building-Level Share: When to Use It

Building-level Share Type is the standard configuration for most commercial leases. Use it when:

• The lease defines CAM expenses as building-wide expenses shared by all tenants
• The lease denominator is "total rentable area of the Building"
• Expenses (HVAC, janitorial, landscaping, common area utilities) benefit all tenants regardless of floor
• The building has a single common area maintenance pool covering all floors

Math example (Building-Level):

Building: 120,000 RSF total Floor 3: 30,000 RSF Tenant A on Floor 3: 15,000 RSF

• Building-level pro-rata: 15,000 / 120,000 = 12.5%
• If total CAM pool is $600,000, Tenant A pays: $75,000

This is correct when the lease says Tenant A is responsible for 12.5% of building operating expenses.

Floor-Level Share: When to Use It

Floor-level Share Type applies when expenses are structured differently by floor, typically in multi-tenant office buildings where each floor has its own HVAC system, janitorial service, and some dedicated common areas. Use it when:

• The lease explicitly defines the denominator as floor square footage
• The building has separate operating expense pools by floor
• Each floor has materially different operating costs (dedicated HVAC units, different service levels)
• The lease contains language like "costs attributable to the floor on which the Premises are located"

Math example (Floor-Level):

Building: 120,000 RSF total Floor 3: 30,000 RSF total Tenant A on Floor 3: 15,000 RSF

• Floor-level pro-rata: 15,000 / 30,000 = 50.0%
• If Floor 3 operating costs are $80,000, Tenant A pays: $40,000

Note the difference: Tenant A pays $40,000 under floor-level allocation versus $75,000 under building-level. The correct answer depends entirely on what the lease says, not which number is larger.

Why floor-level exists: In a 10-floor office building where a pharmaceutical company occupies all of Floor 3 and runs 24/7 operations with higher HVAC demand, floor-level allocation ensures they pay for the actual costs their operations drive. Other tenants don't subsidize those costs.

Lease Language to Look For

Building-level indicators:

• "Tenant's proportionate share of the Building's operating expenses"
• "...calculated by dividing Tenant's rentable square footage by the total rentable square footage of the Building"
• "Landlord may adjust the denominator to exclude anchor tenant space" (still building-level, just with a modified denominator)

Floor-level indicators:

• "Tenant's proportionate share of the costs of operating and maintaining the floor on which the Premises are located"
• "...calculated by dividing Tenant's rentable square footage by the total rentable square footage of the [floor/level] on which the Premises are located"
• "Floor operating expenses" as a defined term in the lease

Mixed allocation (split leases): Some tenants occupy space on multiple floors and have a split allocation: building-level for common building expenses, floor-level for floor-specific expenses. MRI handles this through separate charge codes rather than a single Share Type.

How to Audit Share Type Assignments

Run this audit before each reconciliation cycle:

1. Export the tenant roster from MRI with Share Type, Floor, and RSF columns
2. Pull lease abstracts for each tenant, noting the denominator definition
3. For each tenant, verify: Does the MRI Share Type match the lease denominator definition?
4. Calculate a spot check: For 3-5 tenants, manually calculate their pro-rata share using MRI's denominator and compare against your lease-defined calculation
5. Flag any mismatches: a tenant on building-level in MRI but floor-level in their lease is systematically over- or under-billed

Pay particular attention to:

• Tenants who moved in during the past 3 years (Share Type may have been set quickly at lease execution)
• Tenants who renewed with amended CAM terms (Share Type may not have been updated for the renewal)
• Multi-floor tenants (Share Type may be inconsistently set across their multiple space records)

Fixing Incorrect Share Types

Before making a correction, calculate the financial impact:

1. Determine the correct Share Type from the lease
2. Calculate what the tenant should have been billed under the correct configuration for each historical year
3. Compare to what they were actually billed
4. Determine if the error is subject to reconciliation cure periods under the lease (most leases have 1-2 year lookback limits)

Then:

1. Update the Share Type field in MRI for the affected tenant
2. Recalculate the current-year reconciliation using the corrected configuration
3. If prior-year corrections are within the lease's cure period, prepare a corrected reconciliation statement
4. Document the change in your audit trail

Do not make the correction silently. Document it, communicate it to the tenant if a payment adjustment results, and retain the original calculation for your records.

CapVeri's pro-rata calculator verifies each tenant's share against the lease-defined denominator and flags mismatches between MRI's configured Share Type and what the lease actually requires.

Related Resources

• CAM Reconciliation Guide: complete step-by-step reconciliation process

• MRI Software CAM Setup Guide

• Pro-Rata Share Calculator

Sources

1. MRI Software - Property Management
2. CapVeri Sources & Research - MRI public procurement pricing