How Do You Calculate Common Area?

What is usable area?

The actual occupiable area of a floor.

Usable area can house furniture and personnel.

A building’s useable area is the sum of all Usable Areas of floors located in the building.

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What is included in Cam?

CAM charges are the cost that a landlord pays to operate and run a commercial property. … This would include the common area maintenance, charges for cleaning up common areas, security for the property, property taxes, property insurance, repairs and maintenance.

What is common area apartment?

Common areas in a residential development are used by all apartment owners. … Parking lots, elevators, lobby and corridors are the examples of common areas. Owners of apartments often have to pay the co-operative society or home-owners association for the upkeep of such areas.

How do you calculate common area maintenance charges?

Based on a tenant’s proportionate share of a building, common area maintenance charges are a percentage calculated by dividing the square footage occupied by the tenant, by the total square footage of the building. The resulting number is called the lessee’s Pro-Rata Share, and it is specified in the lease agreement.

What is common area factor?

The common area factor is a number which refers to shared spaces on a single floor, and within a building in its entirety. … Typically when you are quoted a common area factor by the landlord or the building’s leasing agent it includes the sum of the floor common area factor and the buildings common area factor.

What is a core factor?

Main definition. Core Factor. The percentage of common areas in a building (rest rooms, hallways) that, when added to the net usable square footage equals the net rentable square footage. May be computed for a building or floor of a building.

How are CAM charges calculated?

Then, that CAM estimate is divided proportionally across the tenants in the building. Your percentage of the expense is calculated by dividing your square footage by the gross leasable area of the building.

Are Cam charges negotiable?

Although rental rates, build out responsibilities and other items of the lease can generally be negotiated, CAM Fees are normally not negotiable. The CAM Fees are based on real costs that are incurred by the landlord and passed through to the tenant. The fees are generally based on last year’s charges.

What expenses can be grossed up?

GROSS-UPS FOR OPERATING COSTS. As a property’s occupancy rate rises or falls, certain operating costs also rise and fall. Costs which typically fluctuate with occupancy include janitorial, garbage removal and utility costs.

What is rentable sqft?

The rentable square footage comprises of the usable square footage plus a fraction of the building’s shared space. The shared space constitutes the common areas of the building, including restrooms, shared hallways, elevators, stairwells, and storage rooms, cafeteria, lobby, fitness center etc.

What is circulation factor?

The Circulation. Factor is the percentage of Usable Area that makes up the Circulation Area.

What is considered a common area?

A common area is, in real estate or real property law, the “area which is available for use by more than one person…” The common areas are those that are available for common use by all tenants, (or) groups of tenants and their invitees.

Is a balcony a common area?

Balconies or patios are part of the common elements because they are outside the boundaries of a unit. They are considered limited common elements because their use is limited to the owner or resident of the adjacent unit. … Generally, the owner is responsible for these areas, including the surface and railings.

Is a backyard a common area?

Balconies, lawns, terraces, and backyards—these are the places where people are still in their homes, and also in a common area because they can all be seen by neighbors. Gardens, pools, and decorations—they reflect the appearance of the entire community but they are an owner’s private property as well.

What is common area electricity?

First, I will answer a question many of you may be asking “what is a common area?” A common area is considered to be an area within a residence that is available for common use by all tenants, or possibly groups of tenants and their invitees. An example would be a laundry room, or work-out facility, or a waiting area.

What is the difference between Cam and NNN?

A NNN or triple net lease listing states the base lease rate for the space and then will charge a NNN fee or CAM (Common Area Maintenance) charges on top of the base rate. … Gross Lease: The tenant pays a set sum or “gross” amount for rent and the landlord pays all real estate expenses.

What is the difference between the rentable and usable area called?

A helpful tool that tenants and landlords use to understand the difference between a facility’s rentable square feet and usable square feet is called the load factor.

How do you find the common area factor?

In order to derive the Load Factor using the Rentable and Useable Areas, the formula is:Load Factor = (Rentable Area / Useable Area) – 1.Rentable Area = Useable Area x (1+ Load Factor)Useable Area = Rentable Area / (1+ Load Factor)Loss Factor = (Rentable Area – Useable Area) / Rentable Area.More items…•

What are common area expenses?

What are Common Area Expenses? Common area expenses may include maintenance and repairs of the common walkways and parking lots, security, property management, and utilities for common areas. The Tenant will also pay their share of property taxes and property insurance.

What is considered common area maintenance?

Common Area Maintenance charges, or CAM for short, are one of the net charges billed to tenants in a commercial triple net (NNN) lease, and are paid by tenants to the landlord of a commercial property. … It is assumed that every tenant benefits from a clean environment, and should share in that cost.

How do you calculate core factor?

The core factor can be calculated by dividing the rentable square footage by the usable square footage. It is imperative that we, as Tenant Rep’s educate our clients on understanding this number in order to allocate costs and compare different options.