CAM Reconciliation Example: Step-by-Step with Real Numbers
A complete worked example for a 3-tenant retail strip center — from GL expenses to tenant true-ups, including gross-up at 82% occupancy and a 5% CAM cap.
The Building: Westgate Retail Center
This example uses a 48,000 SF retail center with 3 occupied tenants. The building was 82% occupied in 2025 (one unit vacant for 7 months), triggering gross-up for variable expenses. Two tenants have CAM caps; one does not.
Build the Recoverable Expense Pool
| Expense | Type | Actual | Recoverable | Note |
|---|---|---|---|---|
| Property Taxes | Fixed | $142,800 | $142,800 | |
| Property Insurance | Fixed | $28,400 | $28,400 | |
| Landscaping & Grounds | Variable | $36,200 | $36,200 | |
| Parking Lot Maintenance | Variable | $18,600 | $18,600 | |
| Cleaning & Janitorial | Variable | $24,300 | $24,300 | |
| Utilities (Common Area) | Variable | $31,500 | $31,500 | |
| General & Admin (Mgmt Fee) | Fixed | $22,000 | $22,000 | |
| Roof Repair (Capital) | Fixed | $15,000 | — | Capital exclusion per lease §8.3 |
| Total Recoverable | $318,800 | $303,800 | $15K capital excluded | |
Error found: The original GL included a $15,000 roof repair as a recoverable expense. Lease §8.3 excludes capital improvements. Removing it reduces the pool by $15,000 — which would have been billed improperly to all three tenants.
Apply Gross-Up (82% → 95%)
The building was only 82% occupied in 2025. The leases require gross-up of variable expenses to 95%. Fixed expenses (taxes, insurance, management fee) are not grossed up.
Gross-up adds $17,534 to the recoverable pool. Without gross-up, each tenant would have underpaid for shared variable services that don't scale down proportionally with vacancy.
Calculate Each Tenant's True-Up
Tenant 1: Coffee & Co. (1,800 SF)
Tenant 2: Ridgeline Fitness (8,500 SF)
Tenant 3: Metro Dental (4,200 SF)
Reconciliation Summary
| Tenant | CAM Obligation | Est. Paid | True-Up |
|---|---|---|---|
| Coffee & Co. | $7,560 | $7,800 | -$240 |
| Ridgeline Fitness | $56,903 | $34,800 | +$22,103 |
| Metro Dental | $16,848 | $16,800 | +$48 |
| Total | $81,311 | $59,400 | $21,911 |
Errors Found in This Reconciliation
Frequently Asked Questions
What does a CAM reconciliation look like in practice?
A CAM reconciliation compares actual building operating expenses for the year to the estimated amounts tenants paid monthly. The landlord calculates each tenant's pro-rata share of actual expenses (adjusting for gross-up and caps per the lease), then compares to payments received. Tenants owe a true-up if actuals exceed estimates, or receive a credit if estimates were too high.
What is a typical CAM reconciliation true-up amount?
True-up amounts vary widely by building, market, and expense volatility. A mid-size retail center might see true-ups of $0.50–$2.00 per SF per year for most tenants. Landlords who haven't reconciled in multiple years or who have significant billing errors may face much larger true-ups or credits.
What are common errors found in a CAM reconciliation?
The most common errors are: (1) incorrect gross-up application — grossing up fixed expenses that shouldn't be grossed up, or using the wrong occupancy threshold; (2) wrong denominator — using occupied SF instead of total leasable SF; (3) non-recoverable expenses included in the pool; (4) CAM cap misapplication.
How long does a CAM reconciliation take?
Manual CAM reconciliation for a single property typically takes 4–8 hours per tenant when done in Excel. CapVeri automates this to under 15 minutes per property by ingesting the GL export directly.
Related Resources
Run This Calculation on Your Own Portfolio
Upload your GL export from Yardi or MRI and CapVeri will run the full reconciliation — gross-up, pro-rata, caps, and true-up — in minutes.
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