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CAM Reconciliation Calculations: Examples
The CAM expense amount is calculated separately for each expense in a CAM expense pool. The total of all CAM expenses is then compared to the single CAM charge assigned to a lease and will lead to a single CAM recoverable amount.
Review the following examples to better understand how the CAM reconciliation is calculated using the Base Year Reconciliation Method and Current Year Reconciliation calculation methods.
Base Year Reconciliation Method
Base and Current Year Actual
Units A and B are rented on April 1, 2016. Unit A is reconciled on the calendar year and unit B is reconciled on the lease year.
The CAM expense pool has only one expense that uses the following accounts for the actual amounts: 100-6500-10 and 100-6800-00.
| Month | 100-6500-10 | 100-6800-00 | Total | Month | 100-6500-10 | 100-6800-00 | Total | |
| January 2016 | 150.00 | 50.00 | 200.00 | January 2017 | 110.00 | 100.00 | 210.00 | |
| February 2016 | 100.00 | 70.00 | 170.00 | February 2017 | 130.00 | 30.00 | 160.00 | |
| March 2016 | 200.00 | 30.00 | 230.00 | March 2017 | 100.00 | 50.00 | 150.00 | |
| April 2016 | 150.00 | 40.00 | 190.00 | April 2017 | 130.00 | 40.00 | 170.00 | |
| May 2016 | 140.00 | 60.00 | 200.00 | May 2017 | 150.00 | 50.00 | 200.00 | |
| June 2016 | 130.00 | 40.00 | 170.00 | June 2017 | 140.00 | 30.00 | 170.00 | |
| July 2016 | 100.00 | 50.00 | 150.00 | July 2017 | 120.00 | 60.00 | 180.00 | |
| August 2016 | 110.00 | 30.00 | 140.00 | August 2017 | 110.00 | 80.00 | 190.00 | |
| September 2016 | 130.00 | 60.00 | 190.00 | September 2017 | 130.00 | 60.00 | 190.00 | |
| October 2016 | 150.00 | 50.00 | 200.00 | October 2017 | 100.00 | 50.00 | 150.00 | |
| November 2016 | 140.00 | 70.00 | 210.00 | November 2017 | 90.00 | 70.00 | 160.00 | |
| December 2016 | 120.00 | 60.00 | 180.00 | December 2017 | 140.00 | 60.00 | 200.00 | |
| January 2018 | 120.00 | 40.00 | 160.00 | |||||
| February 2018 | 100.00 | 30.00 | 130.00 | |||||
| March 2018 | 110.00 | 50.00 | 160.00 |
Case 1 (Fiscal Year End)
The reconciliation process is run as of December 31, 2017.
- Unit B is not selected for the reconciliation since it has to be reconciled at the end of the lease year (Mar 31st, 2017).
- Unit A is selected for the reconciliation. The base year is 2016
- Base Year Actual (Jan – Dec 2016) = 150 + 170 + 130 + 190 + 120 + 170 + 150 + 140 + 190 + 200 + 210 + 180 = 2,000.00
- Current Year Actual (Jan – Dec 2017) = 150 + 160 + 150 + 170 + 200 + 170 + 180 + 140 + 190 + 150 + 160 + 200 = 2,130.00
Case 2 (Lease Year End)
The reconciliation process is run as of March 31, 2018.
- Unit A is not selected for the reconciliation since it has to be reconciled at the end of the year.
- Unit B is selected for the reconciliation. The base year is 2016
- Base Year Actual (Apr 2016 – Mar 2017) = 190 + 120 + 170 + 150 + 140 + 190 + 200 + 210 + 180 + 210 + 160 + 150 = 1,960.00
- Current Year Actual (Apr 2017 – Mar 2018) = 170 + 200 + 170 + 180 + 190 + 190 +150 + 160 + 200 + 160 + 130 + 160 = 2,060.00
Base Year Reconciliation
A building is 10,000 sq. ft. The building consists of 10 units, 1,000 sq. ft. each. Three units are excluded from the CAM expense recovery.
- Unit A participates in the CAM expense recovery, but 300 sq. ft. of the unit are exempt.
- Unit B participates in the CAM recovery process, but 200 sq. ft. of the unit are exempt.
Unit A is reconciled at the end of 2017. The base year is 2016. The following are the actual expenses:
| 2016 CAM Expenses Actual: | 40,000.00 |
| 2016 Occupancy rate: | 55% |
| 2017 CAM Expenses Actual: | 55,000.00 |
| 2017 Occupancy rate: | 70% |
| Tenant gross-up: | 95% |
| Annual non-cumulative cap: | 5% |
| Base year grossed-up amount: | 69,090.00 (40,000 x 100% / 55%) x 95% |
| 2017 Grossed-Up Amount: | 74,642.00 (55,000 x 100% / 70%) x 95% |
| Amount Due based on Actual Expense: | 5,553.00 (74,642 – 69,090) |
| Annual Cap Amount: | 2,130.00 (69,090 x 5%) |
| Amount Due Based on Cap: | 2,130.00 (the lessor of cap and actual) |
| (69,090 + 2130) x 5% - next year cap |
| Pro-Rata Share Method | Denominator | Actual Partial Year |
| Fixed percent | 7% | 2,130 x 7% = 149.00 |
| Building Area | 1,000 / 10,000 = 10% | 2,130 x 10% = 213.00 |
| Tenants Area | 700 / (10,000 – 3,000 (3 units) – 300 (A) – 200 (B) = 11% | 2,130 x 11% = 234.00 |
Current Year Reconciliation
A building is 10,000 sq. ft. The building consists of 10 units, 1,000 sq. ft. each. Three units are excluded from the CAM expense recovery.
- Unit A participates in the CAM expense recovery, but 300 sq. ft. of the unit are exempt.
- Unit B participates in the CAM recovery process, but 200 sq. ft. of the unit are exempt.
Both units are rented on April 1, 2016. Unit A is reconciled on based on the fiscal year. Unit B is reconciled based on the lease year.
The CAM expense pool has only one expense that uses the following accounts for the actual amounts: 100-6500-10 and 100-6800-00.
| Month | 100-6500-10 | 100-6800-00 | Total |
| January 2016 | 150.00 | 50.00 | 200.00 |
| February 2016 | 100.00 | 70.00 | 170.00 |
| March 2016 | 200.00 | 30.00 | 230.00 |
| April 2016 | 150.00 | 40.00 | 190.00 |
| May 2016 | 140.00 | 60.00 | 200.00 |
| June 2016 | 130.00 | 40.00 | 170.00 |
| July 2016 | 100.00 | 50.00 | 150.00 |
| August 2016 | 110.00 | 30.00 | 140.00 |
| September 2016 | 130.00 | 60.00 | 190.00 |
| October 2016 | 150.00 | 50.00 | 200.00 |
| November 2016 | 140.00 | 70.00 | 210.00 |
| December 2016 | 120.00 | 60.00 | 180.00 |
| January 2017 | 110.00 | 40.00 | 150.00 |
| February 2017 | 130.00 | 30.00 | 160.00 |
| March 2017 | 100.00 | 50.00 | 150.00 |
Case 1 (Fiscal Year End)
The reconciliation process is run as of December 31, 2016.
- Unit B is not selected for the reconciliation since it has to be reconciled at the end of the lease year (Mar 31st, 2017).
- Unit A is selected for the reconciliation. The actual CAM expense amount is calculated as follows, depending on the method used to reconcile a partial year:
- Average Method: Actual Expense (Jan – Dec 2016) = (200 + 170 + 230 + 190 + 200 + 170 + 150 + 140 + 190 + 200 + 210 + 180) x 274 days / 365 days = 1,674.00
- Actual Method: (Apr – Dec 2016) = 190 + 200 + 170 + 150 + 140 + 190 + 200 + 210 + 180 = 1,630.00
The expense amount allocated to the unit A will be calculated as following, depending on the CAM Reconciliation Calculations: Examples Calculation method:
| Pro-Rata Share Method | Denominator | Average Partial Year | Actual Partial Year |
| Fixed percent | 7% | 1,674 x 7% = 117.00 | 1,630 x 7% = 114.00 |
| Building Area | 1,000 / 10,000 = 10% | 1,674 x 10% = 167.00 | 1,630 x 10% = 163.00 |
| Tenants Area | 700 / (10,000 – 3,000 (3 units) – 300 (A) – 200 (B) = 11% | 1,674 x 11% = 184.00 | 1,630 x 11% = 179.00 |
Case 2 (Lease Year End)
The reconciliation process is run as of March 31, 2017.
- Unit A is not selected for the reconciliation since it has to be reconciled at the end of the fiscal year.
- Unit B is selected for the reconciliation. The actual expense amount is calculated as follows:
- Average Method: Not calculated because it is not supported,
- Actual Method: (Apr 2016 – Mar 2017) = 190 + 200 + 170 + 150 + 140 + 190 + 200 + 210 + 180 +150 + 160 +150 = 2,090.00
The expense amount allocated to the unit B will be calculated as following, depending on the Pro‑Rata Calculation method:
| Pro-Rata Share Method | Denominator | Average Partial Year | Actual Partial Year |
| Fixed percent | 7% | N/A | 2,090 x 7% = 146.00 |
| Building Area | 1,000 / 10,000 = 10% | N/A | 2,090 x 10% = 209.00 |
| Tenants Area | 800 / (10,000 – 3,000 (3 units) – 300 (A) – 200 (B) = 12% | N/A | 2,090 x 12% = 251.00 |
