Pass Through Cap Calculator

CAM caps limit recovery. This calculator quantifies the landlord cost.

Base-year CAM

Annual cap increase %

Actual CAM growth %

Lease years remaining

Cumulative cap shortfall

$24,522

Year 1 shortfall

$950

Actual vs cap gap %

2.50%

How the math works

Cap path = base × (1+cap)^yr. Actual path = base × (1+actual)^yr. Shortfall = actual − cap over term.

A 2.5% cap gap over 6 years on a $38k base tenant CAM compounds quickly — about $18-20k landlord absorption over term. Multiply across 40-60 tenants for a portfolio shortfall estimate. Cap structures typically give up 3-8% of gross recoveries.

How to Use

Enter base-year CAM.
Enter annual cap increase %.
Enter actual CAM growth %.
Enter lease years remaining.
Read cumulative cap shortfall.

Frequently Asked Questions

Cap types?

Fixed cap (e.g. 5% annual increase). CPI cap (indexed). Cumulative cap (banks unused increases). Non-cumulative cap (use-it-or-lose-it). Capped only on controllable (excludes taxes, insurance, utilities). Each type behaves differently when expenses spike.

When caps bite?

Property tax reassessment (triggered by sale). Major repair year (roof, parking lot). Insurance spike (post-hurricane markets). Utility hike. In these years, landlord absorbs the uncapped delta — can run 6 figures on one asset.

Negotiation leverage?

Strong tenants (anchors, credit): 4-5% cumulative cap. Mid-market: 6-7% cumulative or non-cumulative. Small tenants: 8-10% or no cap. Landlord counter: exclude non-controllable from cap (taxes, insurance, security, snow removal).

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.