Accounting question

Question

Help in calculating admin fee if tenant do not have to pay 9% of pro rata share of all cam expenses.

given: 100k cam
20k admin exp
pro rata share 12%

Answer 1

Hi Jay,

 

If I understand the question correctly, the landlord normally charges the tenant an admin fee equal to 20% of the tenant's pro rata share of CAM (based on the relationship of admin to CAM).  So, typically, the admin fee would be 20% of $12,000, or $2,400.  

 

If, however, the tenant were relieved of 9% of its pro rata share of CAM, the admin fee would be equal to $2,184, calculated as follows:

 

The tenant's reduced CAM cost would be equal to 91% * $12,000 = $10,920.  The admin fee, then, would be equal to 20% of $10,920, which is $2,184.  

 

In addition to other assumptions made, my calculation interprets the wording regarding the 9% precisely as it is written.  There are several other ways to interpret the phrase, but I have no reason to assume that you, Jay, mean anything other than exactly what you say.

 

Please let me know if my understanding and assumptions are in line with your intent.

 

Cheers,

 

Jeff