How the landlord calculates monthly CAM estimates -- prior year actuals, budget-based, or fixed amount.
Also known as: estimated CAM, CAM budget method, monthly CAM calculation
By Angel Campa, Founder · Updated March 2026
The estimate method affects cash flow predictability. Budget-based estimates can be inflated if the landlord pads the budget, resulting in the tenant overpaying throughout the year and waiting for a year-end credit. Prior-year-actuals-based estimates are more grounded but may underestimate costs in rising-expense environments. Fixed amount estimates provide maximum predictability but may not adjust to actual costs.
Found in the "Operating Expenses" or "Monthly Estimates" section. Look for language about how the landlord determines the "estimated monthly payment" or "monthly CAM installment." The methodology is often described in a single paragraph.
Lextract uses a combination of AWS Textract OCR and Claude AI to identify and extract the cam estimate method from your lease PDF. The AI searches for the field name and common aliases like "estimated CAM", "CAM budget method" across all pages of the document, then assigns a confidence score based on OCR quality and extraction certainty. Fields with lower confidence are flagged for human review.
Lease Structure
The categorization of expense sharing.
Pro Rata Share
The tenant's fractional responsibility for total building operating expenses.
Base Year
The foundational year used to calculate operating expense increases in gross leases.
CAM Cap %
The maximum allowable annual increase for controllable operating expenses.
CAM Cap Type
Specifies whether the CAM cap is cumulative and compounding or non-cumulative.
Gross-Up %
The assumed occupancy level used to extrapolate variable operating expenses.
Budget-based estimates are most common, where the landlord prepares an annual operating budget and bills tenants 1/12 of their pro rata share monthly. Prior-year actuals are the second most common method. Fixed estimates with no true-up are rare and typically found only in fixed-CAM lease structures.
Some leases allow mid-year adjustments if actual expenses significantly exceed estimates. This protects the landlord from large year-end shortfalls but can cause unexpected cash flow disruptions for tenants. Tenants should negotiate limits on mid-year increases.
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