Commercial Real Estate Blog by Madison
Tag Archives: common area maintenance

CAM Negotiations – What You Need to Know before Signing, Part 2

By: Arnon Wiener, Esq., CEO, Real Diligence and LeaseProbe

It is news to no one that CAM charges can be a contentious issue for Landlords and Tenants alike. Generally, Landlords want the CAM clause to be broad and all-encompassing, covering the Landlord’s costs of ownership, management, maintenance, repair, replacement, inspection, improvement, operation, and insurance of the property together with any costs allocated to administration and overhead. The Landlord benefits from a highly expansive CAM definition to avoid the risk that any necessary costs of operation have no corresponding revenue to cover them.

Tenants, on the other hand, generally understand that they need to compensate the Landlord for operating and maintaining the center. But they view the Landlord’s ownership costs as part of the Landlord’s cost of doing business and not a recoverable operation cost. This “maintenance versus ownership” struggle shapes many of the issues relating to inclusion in and exclusion from CAM costs

Here are some questions Landlords should consider. Continue reading

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CAM Negotiations – What You Need to Know before Signing, Part 1

By: Arnon Wiener, Esq., CEO, Real Diligence and LeaseProbe

Common Area Maintenance (CAM) charges can be a contentious issue for Landlords and Tenants alike. CAM charges are one of the net charges billed to Tenants in a commercial lease, and may be charged in addition to base rent. On one hand, Landlords may feel that their expenses are high, and this is the chance to be refunded for the outlay. On the other hand, Tenants may feel squeezed by the rent, and are resentful of any additional charges. CAM becomes the rope in a tug-of-war.

When entering CAM negotiations, there are considerations for both Tenants and Lenders. Continue reading

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Two Most Common Mistakes to Avoid When Using Argus Models

By: Arnon Wiener, Esq., Chief Executive Officer, Real Diligence and LeaseProbe

In a financial due diligence review for a real estate acquisition, facts are king. The more detailed information the buyer can gather and analyze, the more he can be confident that he is making a value added acquisition. Argus models are powerful tools used for cash flow projection, transaction analysis and asset valuation. When used correctly, Argus models can optimize the value of your commercial real estate acquisition.

Aside from their standard use in financial due diligence, Argus models can also potentially be utilized as a business tool. A well-structured and comprehensive Argus model can be invaluable to investors considering a potential transaction. There are some potential uses for Argus models which are commonly overlooked by real estate investors. If modeled properly, these uses can provide deep insight into the potential NOI of a commercial property.

In this regard, there are two common mistakes made in using Argus models which should be avoided. Continue reading

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Right on the Money: It's in the Landlord and Tenant's Best Interests for CAM Calculations to be 100% Accurate.

By David I. Tesler, Esq., CEO, LeaseProbe / Real Diligence

The landlord/tenant relationship can be fraught with difficulties. As in any business relationship, it is important for both the tenant and the landlord to set clear expectations and guidelines. While real estate leases are intended to establish the rights and obligations of each side, they are often lengthy and complex documents, with unique and individual provisions as well as numerous addendums which can override previous lease language. Such complexity can lead to mistakes and misunderstandings.

One area that is fraught with errors is Common Area Maintenance (CAM) charges. Errors and mistakes between the obligations spelled out in the lease agreements and the CAM amounts billed are typical. But ultimately it is in every both the landlord and tenant’s best interests to ensure that CAM bills are 100% accurate. Here’s why. Continue reading

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Know Your Commercial Lease!

Why You Should Read Over Your Office Building Or Commercial Lease Thoroughly In my experience, the vastcanada goose Canada Goose dame majority of Landlords and Tenants read through theircanada goose Calgary Jakke mænd commercial leases with the same focus and … Continue reading

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