Commercial leases (NNN / CAM)
General information, not legal or tax advice. Landlord-tenant and tax rules vary by state, county, and city and change often. Confirm against current statute or a licensed professional in the relevant jurisdiction before acting.
For renters
Commercial
'NNN' means triple net: on top of base rent you pay your pro-rata share of the three 'nets' — property taxes, building insurance, and common area maintenance (CAM). Your share is usually your leased square footage as a percentage of the building's rentable area.
That's why a low quoted base rent can be misleading. Before signing, ask for the current NNN/CAM estimate per square foot so you can see your true occupancy cost, and compare it against gross or modified-gross alternatives where the landlord absorbs more of those expenses.
For landlords
Commercial
CAM runs on an estimate-and-true-up cycle. You bill tenants monthly estimates during the year, then within roughly the first 90 to 120 days of the following year you reconcile actual operating costs against what you collected and send each tenant a statement plus a bill or credit for the difference.
Allocate by a written, consistent method (each tenant's pro-rata share), exclude capital items if the lease requires it, and keep ledgers and invoices ready — tenants frequently have audit rights. Collabrio's CAM-aware leases and general ledger track estimates and actuals per tenant so the true-up is a report, not a spreadsheet rebuild.
For renters
Commercial
Usually, yes. Most NNN leases grant tenants an audit right — but you typically must invoke it in writing within a window, often 90 to 180 days of receiving the reconciliation statement, so don't sit on it.
Red flags worth auditing include sharp, unexplained year-over-year jumps, capital projects billed as operating expenses, vague or excessive management fees, and a landlord who won't produce backup invoices. Re-read your lease's audit clause and its deadlines, then request the supporting ledger before the window closes.
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