Glossary of Terms

Occupancy Costs 2016-06-14 08:00:00

Occupancy Costs

The total amount of property-related expenses paid by a tenant for use of a particular space. Occupancy costs include base rent as well as expense reimbursements paid by the tenant such as CAM charges but excludes business operating expenses such as payroll and sales tax. To calculate a tenant’s occupancy cost, simply add all property-related expenses pertaining to the specific space.  

For example, if a tenant occupies 7,000 square feet and pays $14.00 per square foot in base rent plus $3.00 per square foot in CAM charges, then the total annual occupancy costs are $119,000 ((7,000sf x $14.00/sf base rent) plus (7,000sf x $3.00/sf CAM charges)).