Thread: What is CAM and/or NNN in commercial real estate?

My sister's looking to get into retail business and have been checking out different 'for lease' places and the brochures she gets all have # SF/CAM or # SF/CAM NNN year 1, something like that along the lines, what are they? Thank you!

NNN refers to the lease structure. Each of the N's refer to a different pass-through charge that is not including in the base rent. Normally they stand for property taxes, insurance, and CAM (common area mantenance). The charges are structured this way so that changes in taxes, insurance, etc. don't affect the way that a retail center is valued (by it's rental revenue). What it means to you is simply another charge that affects your bottom line, however you should ask what is included in CAM. Normally CAM refers to repairs & maintence in all common areas of the retail center, whether it be landscaping, pavement, roof, etc. However, depending on what local market & the particular center, you may or may not have things like sewer, water, and trash removal included in CAM.

PS- wasn't sure if you were also asking how to calculate $/SF rent, but is as follows:

Square Feet X Rate = total yearly rent. Just divide by twelve to get the monthly.

Good reply RealDawg. What you have with NNN is known as a "triple net lease" - you can do an internet search to find out all about them. It's a fairly common arrangement for leasing retail space.

yes... and if you can find a "flat" rate... like I have on my office it can save you LOTS of money!

Originally Posted by ReelDawg

NNN refers to the lease structure. Each of the N's refer to a different pass-through charge that is not including in the base rent. Normally they stand for property taxes, insurance, and CAM (common area mantenance). The charges are structured this way so that changes in taxes, insurance, etc. don't affect the way that a retail center is valued (by it's rental revenue). What it means to you is simply another charge that affects your bottom line, however you should ask what is included in CAM. Normally CAM refers to repairs & maintence in all common areas of the retail center, whether it be landscaping, pavement, roof, etc. However, depending on what local market & the particular center, you may or may not have things like sewer, water, and trash removal included in CAM.

PS- wasn't sure if you were also asking how to calculate $/SF rent, but is as follows:

Square Feet X Rate = total yearly rent. Just divide by twelve to get the monthly.

Nice answer ReelDawg!