What TICAM Means for Your LeaseThe Costs on Top of Base Rent

If you’ve looked at retail or office space in the Carolinas, you’ve probably seen a listing like “$19/SF NNN plus $6.50/SF TICAM.” The first number is your base rent. The second is your share of the costs of running the property, and it can add a third or more to what you actually pay.

What TICAM stands for

TICAM is short for taxes, insurance, and common area maintenance. In a triple net (NNN) lease, the tenant pays its share of all three on top of base rent:

• Taxes: the property tax bill for the building and land.
• Insurance: the landlord’s property and liability coverage.
• Common area maintenance (CAM): parking lot upkeep and lighting, landscaping, shared utilities, trash, snow removal, common-area cleaning, and similar costs.

Your share is usually based on your suite’s square footage as a percentage of the building. If you lease 2,000 SF in a 20,000 SF building, you typically pay 10% of the shared costs.

How it’s billed

You don’t wait for the tax bill. The landlord estimates TICAM for the year and you pay one-twelfth of it each month with your rent. After the year closes, the landlord compares the estimate with actual costs and either bills you the difference or credits you back. That year-end step is called the reconciliation.

Illustration based on the published rates for City Plaza Suite 100 in Rock Hill. Actual charges are set by each lease.

NNN vs. gross vs. full service

Not every lease works this way. In a full service or gross lease, the landlord folds operating costs into one rent number, which is common for office buildings and executive suites. A modified gross lease splits the difference, with some costs included and others passed through. When you compare spaces, compare the all-in number, not just the base rent.

Compare spaces on the all-in number, not the base rent.

Questions to ask before you sign

• What exactly is included in CAM, and is a management or administrative fee added?
• Is there a cap on how much controllable CAM can rise each year?
• What were the actual TICAM charges for the last two or three years?
• When does reconciliation happen, and can you review the backup?
• Who pays for roof, structure, and parking lot replacement, versus routine repairs?

A tenant representative broker can pull this history and negotiate caps for you. In most leases the landlord pays the broker, so that help usually costs you nothing.