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Real Estate Portfolio Management / Cost Administration / Cost Administrator

Recording Actual CAM Costs (Landlord's Cost Administrator)

During the year, the lease cost administrator for the landlord uses the Cost Wizard to enter operating costs incurred at the building or property level. For example, electricity costs for an underground parking space are usually recorded at the building level, while snow plowing is recorded at the property level.

The cost administrator reviews these operating costs and based on experience and negotiations with tenants can designate which costs are Common Area Maintenance (CAM) costs, and which are not. This is an ongoing process as a property incurs new costs or restructures its management fees.

Over time, if a CAM cost is no longer being treated as such, the landlord's cost administrator can change the cost designation from CAM to Non-CAM. When the cost is changed to Non-CAM, it is no longer used in future CAM calculations.

Allocating CAM Costs to Leases

The total amount of CAM costs for a year is typically allocated to each lease in proportion to the lease's share of the building or property's total rentable area. For example, a tenant occupying 30% of the building's total rentable area is allocated 30% of total actual CAM costs for the building. The area the lease occupies is based on its Area - Neg. Rentable, while the building's area is based on its Rentable Area. The landlord's financial accounting system can calculate the proration, or you can use the ARCHIBUS chargeback features to do so. By default, the Chargeback Definitions for both CAM cost categories (RENT - CAM ESTIMATE and RENT - CAM RECONCILIATION) is:

• Assigned To: Leases;
• Rolls Up To: Buildings;
• Prorates To: None.

You can change this chargeback definition if needed.

Note: If you are prorating cost transactions using chargeback, note that this process is NOT impacted by a cost being marked as CAM. The standard cost wizard workflow is used to handle cost proration and chargeback for costs marked as CAM in the same way as it is used for costs marked as Non-CAM.

When the yearly CAM reconciliation process occurs, the landlord's financial accounting system provides the CAM adjustment amount for each lease for the year. The CAM adjustment reconciles the estimated CAM costs the tenant paid with the actual CAM costs the landlord incurred. See The Lease CAM Reconciliation Report.

Dividing CAM Costs

Occasionally, a cost that is typically a shared CAM cost incurred at the building or property level, will be appropriately billed to only one tenant. For example, if a tenant is having a product launch and requires extra security to handle the influx of customers, this cost would not be shared by the other tenants. In cases such as this, you can create two cost records, one for the standard daily security costs marked as CAM, and another for the extra security required by the tenant having the product launch. All tenants will be invoiced for the standard daily security services, so these should be recorded as CAM costs. The security cost for the product launch would be marked as Non-CAM, and would be invoiced only to the tenant needing that service.

Procedure: Designating Costs as CAM or Non-CAM

As the cost administrator for the landlord, you can designate costs as CAM or Non-CAM. You can do this for an individual cost record, or you can bulk assign this designation to multiple cost records.

When you flag a cost as CAM, all costs generated from that cost are also designated as CAM, that is:

• When you schedule a recurring CAM cost, the resulting scheduled cost is marked as CAM.
• When you approve a scheduled CAM cost, the resulting actual cost is marked as CAM.

Designating an Individual cost record as CAM

You can designate an individual cost record as CAM or Non-CAM when you add or edit the record using the Cost Wizard.

To set a single record as CAM or Non-CAM:

1. From the Process Navigator, select Cost Wizard for ... Leases, Buildings, or Properties or Cost Wizard for Accounts.
2. From the drill-down list, select the building, property, or account the cost is associated with.
3. Do one of the following:
   • If editing an existing record, from the Schedule or Approve tab, select Edit in the row for the cost record for which you want to change the CAM designation.
   • If adding a new record:
     • From the Schedule Costs tab, click Add Recurring Cost
     • From the Approve tab, click Add Scheduled Cost
4. On the form for adding or editing the cost record, select Cam or Non-CAM from the CAM Cost list.
5. Enter any additional information for the cost and click Save.

Bulk Assigning costs as CAM

You can also bulk assign costs as CAM or Non-CAM by using the Filter on the Cost Wizard to locate multiple costs for which you want to change this assignment.

To bulk assign costs as CAM or Non-CAM:

1. From the Process Navigator, select Cost Wizard for ... Leases, Buildings, or Properties or Cost Wizard for Accounts.
2. From the drill-down list, select the building, property, or account the costs are associated with.
3. In the Filter Console, select search criteria for the costs you want to bulk assign as CAM or Non-CAM, and click Show. For example, select a building, a cost category, and Non-CAM from the CAM Charges Display Options list to bulk assign a particular cost category previously designated as Non-CAM to CAM.
4. From the Schedule Costs or Approve Costs tab, click Set CAM Status. From the sub-menu, select one of the following.
   • 'as CAM'
   • 'as Non-CAM'

   The grid refreshes to show the updated CAM status in the CAM Cost? column.