Cumulative CAM Cap and Your Commercial Lease

By: Justin Daniels,
Posted: Monday, May 12th, 2008, 1:39 pm EST
Category: Real Estate News



My name is Justin Daniels, a local commercial real estate lawyer in Atlanta. Brad Nix asked me to pen a quick legal post on important legal issues that comes up in commercial Leases.
I came across a situation you should be aware and try to avoid or mitigate when negotiating your office or retail lease. Common Area Maintenance (CAM) are the charges landlords typically pass through to tenants for their office or retail space (etc. parking lot repaving or utilities for the hallway lights). You should always negotiate to cap inevitable increases in these charges or you can be obligated to pay the entire increase. A variation on this theme, however, is a cumulative cap over the term of the lease. You should be aware that this cumulative cap allows the landlord to pass along to you CAM increases in later years of the lease that it did not capture in the early years of the lease.
 
This is best explained in an example. Lets say you negotiate for a 5% cumulative cap. In year one your CAM goes up 2%. In the next year, the landlord can recover 8% in CAM increases from you because they get 5% per year and the three percent (5% - 2%) they did not use in the prior year. For tenants leasing significant square footage, this can add up to a significant expense for which you are unaware and have not have budgeted.
 
This situation can be handled as follows:
 
1) Refuse a cumulative cap.
 
2) If you cannot eliminate it, get a percentage number by which CAM can never increase for each year of the lease (i.e. CAM can never go up more than 7% in any given year).
 
As always your trusted resource for practical legal advice, have a great week. If you want more information please contact me at 404-261-0500.

Maxsell Real Estate gets vote of confidence from Google

By: Brad Nix, Managing Broker
Posted: Thursday, May 1st, 2008, 7:29 am EST
Category: Real Estate News



Maxsell Page Rank

At Maxsell Real Estate, we believe the future of real estate marketing is on the internet.  Maxsell has been an industry leader for web marketing in Metro Atlanta for the past three years and this week we received another vote of confidence from Google.  Maxsell.net moved up to a PageRank 5 for our home page and a PageRank 4 for our blog page.  Many of our larger local competitors do not even have a Page Rank of 2 for the real estate website.

Google describes PageRank:
“PageRank relies on the uniquely democratic nature of the web by using its vast link structure as an indicator of an individual page’s value. In essence, Google interprets a link from page A to page B as a vote, by page A, for page B. But, Google looks at more than the sheer volume of votes, or links a page receives; it also analyzes the page that casts the vote. Votes cast by pages that are themselves “important” weigh more heavily and help to make other pages “important”.

In other words, many other websites and many “important” websites think Maxsell.net is valuable to the consumer as a real estate authority in Metro Atlanta.  All of our clients benefit from Maxsell’s gain in prominence as more links and more visitors mean more buyers viewing your property listed by Maxsell Real Estate.

Thanks to all of our subscribed readers (new visitors should subscribe now) and the thousands of websites who have linked to Maxsell.  We would not be successful without you!