Mitigating The Risk Of Unknown CAM Expenses

While “common area maintenance” provisions are typically a key topic during lease negotiations, a renewed focus has developed due to changes in the economic environment, such as cost uncertainty in the market, interest rates, supply chain shortages, increased cost of materials, tariffs and inflation. Each of these factors make it more difficult for landlords to estimate the cost of operating and owning a commercial property and tend to shift risk away from tenants to landlords. As a result, tenants seemingly have more leverage as they defend against being responsible for unknown expenses. For landlords, it remains essential to maximize the ability to recoup CAM expenses, even when those expenses are becoming more unpredictable.