Get ready to enter the Drive Time Show. from the bottom now we hit. We started from the bottom now we're

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and now three, two three two one here we go We are here today with Michael. There is no real estate topic to obscure beer.

We are joined with a landscaper, a seagull, boats, people. We're here at the Hotel Del and San Diego. We are talking

about CAM Cap. I'm going to read the definition and he's going to tell us what it means in

layman's terms that my third grade mind can handle.

So here we go.

Michael, the maximum amount for which the tenant pays its share of common area

maintenance costs, the owner pays for any cam expenses exceeding that amount. What is the cam cap?

So in many commercial leases a tenant will pay a couple different components of

their rent. They'll pay base rent which is a set amount per month and then they'll

pay a cam or a portion of the

maintenance for the building. You can negotiate a cap on that so you can say

basically I'm not going to pay it more than a certain percentage per year of common area maintenance.

The percentage could be percentage of my base rent or a percentage increase year over year,

but it's some kind of cap on the common area maintenance portion of the rent.

I want to throw an example of what not to do here.

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