Having reviewed thousands of common area maintenance budgets for clients over the years, it is amazing how many properties present CAM budgets to their tenants with 10%+ increases over the prior year. When we ask the property manager to explain what happened, many seem to be caught off-guard, unaware of the significance of the increase, and then scramble to defend a budget that should have never been approved.

Having spent the first half of my career on the landlord side of commercial real estate leasing, I understand how this can happen, but also know that a good property manager who understands the big picture can absolutely keep expenses under control. Under normal circumstances, a 2-4% increase in operating expenses could be expected. However, in our current COVID-19 environment where businesses are struggling to control costs, properties should be looking to keep expenses flat for the upcoming year.

If you have questions about your operating expenses or other lease-related issues, do not hesitate to reach out to National Lease Advisors. Our team will review your lease to uncover red flags and identify erroneous charges that may impact your bottom line. Contact NLA today to speak directly with one of our advisors.