Recovery Pool

A recovery pool is a set of operating expenses that are reconciled as a unit. Rather than treating every building cost as one undifferentiated bucket, a pool groups related costs so they can carry their own recovery rules.

Why pools rather than one bucket

Different cost categories often carry genuinely different terms. A lease may be capped on controllable CAM but uncapped on property taxes. Retail tenants may share site maintenance but not the office lobby. An anchor tenant may be excluded from certain categories entirely.

Modeling these as separate pools means each can have its own:

• Included and excluded costs
• Gross-up target occupancy
• Administrative fee percentage
• Cap basis and rate
• Set of participating leases, each with its own share

A common structure

For a mixed office and retail property:

Pool	Typical contents	Typical treatment
Controllable CAM	Janitorial, landscaping, security, management	Grossed up, capped
Non-controllable	Property taxes, insurance, utilities	Grossed up selectively, usually uncapped
Retail site costs	Parking lot, common signage, site lighting	Shared by retail tenants only

The controllable and non-controllable distinction is the most common split, because caps almost always apply to the former and almost never to the latter — a landlord cannot control a tax reassessment.

What pooling changes operationally

Pools turn reconciliation from a per-lease exercise into a per-pool one. Collect the actuals once, apply the pool’s rules once, then allocate to every participating lease according to its own share, base year, and cap.

That is also what makes a batch reconciliation possible: one pool, many leases, each reconciled against its own terms from the same set of actuals.

See how pools drive the calculation in CAM reconciliation software.