As January kicks off, property managers across the country are shifting into one of the most critical annual tasks: CAM reconciliations. At SVN | The Equity Group, we believe that accurate, timely reconciliations don’t just protect your Net Operating Income — they build tenant trust and dramatically reduce the back-and-forth that tends to pile up during an already busy time of year.
The good news? Starting early makes all the difference. Getting ahead of the process means meeting deadlines with less stress and completing them correctly the first time.
Here are the key focus areas we’re prioritizing this reconciliation season:
1. Confirm Final 2025 Expense Totals
Before anything else, lock in your numbers. Verify that all operating expenses for the year have been accounted for and that your accounting records are complete and reconciled. Chasing down missing invoices or correcting ledger errors mid-reconciliation slows everything down.
2. Ensure Expense Pools Match Lease Terms and Recovery Structures
Not all leases are created equal. Each tenant agreement may have a different definition of what expenses are recoverable. Carefully cross-reference your expense pools against each lease’s specific recovery structure to ensure you’re billing only what’s contractually appropriate.
3. Review CAM Caps, Base Years, Gross-Ups, and Exclusions Per Tenant
This is where the details matter most. Some leases include CAM caps that limit annual increases, base year protections, gross-up provisions for occupancy adjustments, or specific expense exclusions. These must be reviewed on a tenant-by-tenant basis — a one-size-fits-all approach will lead to errors and disputes.
4. Identify Capital vs. Operating Expenses Appropriately
Misclassifying a capital improvement as an operating expense (or vice versa) is one of the most common reconciliation mistakes. Make sure your expense categorization aligns with both accounting standards and your lease language, as many tenants have the right to audit these classifications.
5. Communicate Proactively with Tenants
Nobody likes a surprise bill. Reach out to tenants early in the process, especially if you anticipate a significant true-up in either direction. Proactive communication demonstrates professionalism, reduces disputes, and keeps your tenant relationships intact.
6. Prepare Supporting Documents Based on Lease Requirements
Many leases require landlords to provide detailed reconciliation statements, backup documentation, or audit rights within a specific timeframe. Know what each lease requires and prepare your supporting documents accordingly. Being organized upfront saves significant time if a tenant requests a review.
The Bottom Line
CAM reconciliations are one of the most detail-intensive tasks in property management — but they don’t have to be painful. With the right process, the right team, and an early start, reconciliation season becomes an opportunity to reinforce tenant confidence and protect the financial performance of your asset.
Our team at SVN | The Equity Group is dialed in and ready. Operating expenses are what we do.
Have questions about your reconciliation process? Reach out to our property management team — we’re here to help.
