Common area maintenance refers to costs associated with operating and maintaining shared areas of a commercial property, as defined by the lease.
How it works in retail
A lease may allocate a portion of eligible costs to each tenant. Parking-area upkeep or landscaping can be included, depending on the agreement.
A retail example
A shopping-centre tenant receives a statement allocating its agreed share of maintenance costs for shared spaces.
What to keep in mind
Included costs, exclusions, caps, reconciliation and allocation methods vary by lease. CAM should not be assumed to cover every property expense.
Sources & further reading
Phillips Edison & Company: Retail lease terms
Examples are illustrative. Terminology and measurement conventions can vary by business and market.