Resources · Glossary
What is a pro-rata share?
A pro-rata share is a tenant's percentage of a building or pool, usually its leased area divided by the relevant total area. It decides how much of shared costs, such as CAM, taxes and insurance, the tenant pays.
| Term | Area |
|---|---|
| Pro-rata share | Commercial leases |
| CAM reconciliation | Modules |
| CAM | Glossary |
How is a pro-rata share calculated?
The basic formula is tenant's rentable area ÷ total rentable area of the pool. The denominator matters: some leases use the whole building, some use only leased area, and some use separate pools, for example retail versus office, or a centre with anchor tenants carved out.
Leases may also fix the share as a stated percentage, or use another basis such as units or frontage. Changes in measured area or pool definitions should be documented, because they change every tenant's share.
See also: CAM reconciliation.

What does a pro-rata share calculation look like?
Example (illustrative figures). A tenant leases 3,000 sq ft in a 60,000 sq ft building, so its share is 3,000 ÷ 60,000 = 5%. If recoverable costs for the year are $400,000, its allocation is $20,000, subject to any caps, exclusions or base-year terms.

Leased area or total area: which denominator is used?
The lease decides. Using total building area means the landlord bears the share of vacant space. Using leased or occupied area spreads costs over fewer tenants, so each pays more when the building is partly empty. Tenants usually negotiate for the total-area basis.
Can a pro-rata share change during the lease?
It can if the building is re-measured, space is added or removed, or the pool definition changes, where the lease allows. Many leases fix the share, or the total area, to avoid disputes. Any change should be explained in the annual reconciliation.
What is an anchor exclusion?
In shopping centres, large anchor tenants often pay a fixed contribution rather than a pro-rata share. Their area may be excluded from the denominator, which increases the share paid by smaller tenants. The lease should say how anchors are treated.
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