Cutting CAM Costs Without Cutting Corners

By Karen E. Matroni, CSM
Prime Site Management LLC

Shopping center and office building owners know the number one way to increase your NOI is through cutting your common area maintenance, or CAM, costs. I’m going to outline some simple and effective ways to cut CAM while still maintaining a healthy and vibrant property. Prime Site Management is the company to hire for your commercial real estate needs — and here’s how we can help.

Bid Out Your Services Annually

The number one way to reduce CAM is by bidding out your recurring services every year. Like most property managers, I have my favorite contractors that I enjoy working with — but I still get annual bids because market prices change with market conditions. If another contractor underbids my current one, I’ll offer my preferred contractor a “last look” to see if they can beat the price.

If I find a contractor who’s hungry for work, I can usually secure an under-market rate for the services I need. Starting at a lower base price means smaller contract escalations over time.

Vetting Contractors Carefully

Vetting your bidders is crucial. Online reviews, letters of recommendation, and conversations with current clients provide valuable insight into a contractor’s responsiveness and professionalism.

Don’t overlook smaller contractors! They often have lower overhead, which lets them underbid larger companies — and their owners are typically more hands-on. You may not get all the bells and whistles, but you’ll likely receive better oversight and service. At Prime Site Management, we maintain an extensive contractor database capable of handling every property management challenge that arises.

Budgeting for Predictability

Realistic budgeting is key to keeping CAM costs low. I aim to stay within 2.5%, plus or minus, of budget projections. Large CAM reconciliations can cause friction with tenants at renewal time, so knowing which projects belong in CAM versus capital budgets keeps both tenants and your financials healthy.

Effective budgeting requires both knowledge and experience. Seeing “around the corner” is one of Prime Site Management’s strengths. With over 29 years of experience in commercial property management and leasing, we know how to allocate funds to avoid major surpluses or deficits. Emergencies are handled efficiently because we plan ahead — evaluating each property’s physical systems and budgeting for likely repair or replacement needs as they age. This proactive approach keeps your property stable and financially sound.

Let’s Talk About Savings

If you’d like to learn more about cutting your CAM costs, reach out to me directly at 561-530-2181 or Karen@PrimeSiteCRE.net. Let’s discuss how we can make your property more profitable!