CRE glossary
Common area
Common area is the shared portion of a commercial building, main lobbies, elevator lobbies, corridors, restrooms, mechanical rooms, fitness centers, conference centers, that no single tenant occupies but all tenants benefit from. Tenants pay for common area through their pro-rata share of rentable square feet (RSF includes a load factor for common area) and through CAM operating-expense charges.
Common areas split into two categories. Floor common area: the corridors, restrooms, and mechanical rooms on each floor, varies by floor depending on layout. Building common area: the main lobby, fitness center, conference center, parking facility, single allocation across all tenants. The two combined produce the total load factor.
Common-area maintenance (CAM) is the operating-expense category covering janitorial, repairs, and landscaping for common areas. CAM is one of the three N's in NNN structures and the most disputed line in any operating-expense reconciliation. Tenant audit rights typically apply to CAM specifically.
Modern commercial buildings have grown common areas (more amenities, larger lobbies, fitness centers, conference centers) which improves the tenant experience but raises load factors and CAM. Tenants should evaluate whether the amenities justify the extra cost, for some uses (law firms hosting clients) yes; for others (engineering teams doing heads-down work) often not.
Example
- Floor common area
- 8% of floor SF (corridors, restrooms)
- Building common area
- 8% of building SF (lobby, fitness, conf)
- Total load factor
- 16% (combined)
- CAM operating cost
- $7–$10/SF/year typical for Class A
Broker perspective
When evaluating buildings, ask the listing agent for the load factor breakdown: how much is floor common vs building common. Buildings with bloated lobby/amenity common areas have high building common factors that tenants on lower floors subsidize disproportionately. Compare buildings on $/USF, not $/RSF.
Frequently asked
People also ask
Do I pay rent on common area?
Yes, through the load factor. RSF includes pro-rata common area; rent is paid on RSF.
What's CAM vs common area?
Common area is the physical space. CAM is the operating expense to maintain it (janitorial, repairs, landscaping).
Can I negotiate the load factor?
No, it's a building-level number. But you can negotiate base rent down to compensate for a high load factor.
What's a 'fitness center allocation' in the load factor?
Building common areas like fitness centers are allocated to all tenants. Some tenants negotiate exemptions for amenities they won't use; others accept the broader load factor as the cost of doing business in a Class A building.
Related terms
Common area maintenance (CAM)
Tenant's share of the cost to operate and maintain shared building areas, lobbies, parking, landscaping, HVAC, security.
Rentable vs usable square feet (RSF / USF)
USF is the floor area you can actually use; RSF adds your share of common areas. The ratio between them is the load factor.
Load factor
The percentage of common-area square feet allocated to the tenant on top of usable space, typically 12–18% in Class A office.
Operating expenses (OpEx)
All costs to run the building, taxes, insurance, utilities, janitorial, management, that get passed through to tenants in NNN and modified gross structures.
See common area extracted from a real lease.
Drop a 60-page lease, get a 38-field abstract in 90 seconds, every value cited back to the source page.