What is Denominator?

Definition

In CAM reconciliation, the denominator is the total leasable or rentable square footage used as the divisor when calculating each tenant's pro-rata share of operating expenses. The denominator is defined in each lease and may vary between tenants in the same building — some leases use total building rentable area, others exclude anchor tenant space, and some use only the tenant's floor or zone. Denominator errors are among the most financially impactful CAM billing mistakes because they affect every expense calculation for every tenant simultaneously. Common denominator issues include failing to update the denominator when space is added or removed, using inconsistent denominators across leases in the same property, and not accounting for remeasurement under updated BOMA standards.