CAM stands for Common Area Maintenance, and CAM charges often appear in commercial leases for spaces in office buildings or multi-tenant business parks. (The term is also used as short-hand for Common Area Operating Expenses, defined similarly in many commercial leases.) They are monthly fees that cover the costs of operating, managing and maintaining a building or property. They may sometimes include common area janitorial, utilities, water, trash, landscaping, repairs and maintenance, HVAC maintenance, management, and in some cases building insurance and property taxes.

A NNN (Triple Net) Lease is a commercial lease in which the tenant agrees to be responsible for all the expenses for the property, including insurance, real estate taxes and maintenance. These expenses are in addition to the cost of rent and utilities.

A Full Service Gross Lease (also known as a Full Service Lease or a Gross Lease) is a commercial lease in which the lessor/landlord is responsible for paying the operating costs related to the property. The tenant pays only the base rent which is all-inclusive. In a Modified Gross Lease, the tenant pays the rent as well as a portion of the operating costs.

An option to extend (or an option to renew) a lease gives the tenant, prior to the conclusion of the lease term, the ability to continue leasing/renting the unit at an agreed upon price for an agreed upon amount of time. The tenant may choose to exercise the option and extend the lease or may choose not to exercise the option and allow the lease to terminate. The tenant decides whether the option is exercised or not. If there is no option to renew in the lease agreement, then there is no obligation for either party to renew the lease.

These terms are typically used in commercial office leases. Usable square feet includes the specific area the tenant will occupy, including all office space plus any storage, interior hallways or private restrooms. Everything within the confines of a particular unit is included in the usable square footage calculation. An office building is not made up strictly of office spaces however. Common areas such as corridors, stairways, lobbies, shared conference rooms, kitchenettes and restrooms are used by all building tenants, and landlords typically charge for the use of this space as well. Rentable square feet (RSF) means the usable square feet of an office space plus a pro-rata share of the building’s common areas. (Pro-rata means each tenant pays for their proportionate share of these common area spaces: the larger the office, the larger the share; the smaller the office, the smaller the share.) Rent and CAM charges for office leases are calculated based on a tenant’s Rentable square feet.