Learn the math
NNN calculations, step by step.
See how a property expense pool becomes a tenant charge, how an admin fee changes the total, and how monthly estimates reconcile at year end.
Fictional numbers for illustration. Your lease and billing records control the actual calculation.
The basic equation
The crucial work happens before multiplying: which costs are allowed, and which area defines the share?
Example 01 · Set the share
Start with the area and the expense pool.
Assume a 2,000 square foot suite in a 20,000 square foot building and a $120,000 annual pool of taxes, insurance, and CAM. This simplified example uses one allocation percentage for all three categories.
01 / Allocation
2,000 ÷ 20,000
= 10% tenant share
02 / Annual amount
$120,000 × 10%
= $12,000 for the year
03 / Monthly estimate
$12,000 ÷ 12
= $1,000 per month
Your agreement may define different area denominators, category shares, exclusions, caps, or base years. Check each term before using this formula.
Example 02 · Fee basis
What if an admin fee is added?
Assume $60,000 of the original $120,000 pool is CAM. A 15% admin fee applied to that CAM amount would add $9,000 to the property pool.
Check the lease: Does it permit the fee, define its percentage and calculation base, or exclude certain CAM costs? The arithmetic alone cannot answer whether the charge is allowed.
Example 03 · Year end
How a true-up works.
Suppose the tenant paid $900 per month in estimates: $10,800 total. If the supported annual share is $12,900, the arithmetic difference is $2,100.
A true-up is a billing difference, not proof that every underlying charge is permitted.
Before you accept the total
Four things to verify.
- 01 · Area: Compare the tenant area and denominator with the lease and current area schedule.
- 02 · Categories: Ask for tax, insurance, and CAM detail; check exclusions and duplicate line items.
- 03 · Fees and limits: Apply the lease's fee base, caps, and any base-year language.
- 04 · Payments: Match monthly estimates and credits to the tenant ledger.
Keep learning
The calculation is only the beginning.
Review your own lease
Bring the terms into focus.
Start with a free lease preview. Add an annual statement if available to see initial checks before deciding on a full report.