Commercial real estate accounting is a machine for one question: what does each property actually earn? So the chart of accounts is built property-first, with the industry’s special characters — CAM, tenant improvements, security deposits — given their own lines. Template below.
The numbering backbone
1000s Assets · 2000s Liabilities · 3000s Equity · 4000s Revenue · 5000s Direct costs / COGS · 6000s Operating expenses
Leave gaps between codes (1000, 1010, 1020…) so new accounts slot in without renumbering — the classic rookie regret is a packed sequence in year one.
Sample chart of accounts — commercial real estate
| Code | Account | Type / note |
| 1000 | Operating bank account | Asset |
| 1100 | Rent receivable | Asset |
| 1150 | CAM receivable / reconciliation | Asset — expense recoveries due from tenants |
| 1200 | Buildings (by property) | Fixed asset |
| 1210 | Land (by property) | Fixed asset — never depreciated |
| 1220 | Tenant improvements (TI) | Fixed asset — amortized over lease term |
| 1230 | Leasing commissions (capitalized) | Asset — amortized over lease term |
| 1300 | Accumulated depreciation | Contra asset |
| 2000 | Accounts payable | Liability |
| 2100 | Security deposits held | Liability — tenants’ money |
| 2150 | Prepaid rent received | Liability until the month arrives |
| 2200 | Mortgage payable (by property) | Liability |
| 3000 | Owner/member equity | Equity |
| 4000 | Base rental income (by property) | Revenue |
| 4100 | CAM / expense recoveries | Revenue — pairs with the costs below |
| 4200 | Parking, signage, other income | Revenue |
| 5000 | Recoverable operating costs (maintenance, utilities, taxes, insurance) | Expense — the CAM pool |
| 6000 | Non-recoverable: management fees, owner costs | Expense |
The accounts that do the industry’s work
CAM is a loop, not a line: recoverable costs accumulate (5000), tenants are billed estimates (4100), and the annual reconciliation trues them up — a COA that can’t show the pool vs the recoveries can’t defend a reconciliation to a tenant. Land vs building matters because only buildings depreciate; the purchase-price split is a real allocation with real tax consequences. TI and leasing commissions capitalize and amortize over the lease — expensing a build-out in month one both misstates the year and hides the lease’s true economics.
Structure everything by property (classes/dimensions in your software) — the portfolio P&L is just the sum, but the decisions are per-building. Property-level cash yield then feeds naturally into DCF-style valuation, which is how the industry prices what these accounts record.
FAQ
What is CAM in real estate accounting? Common area maintenance — recoverable operating costs (maintenance, taxes, insurance, utilities) billed to tenants as estimates and trued up in an annual reconciliation.
Why separate land from buildings? Land is never depreciated; buildings are — the purchase-price allocation between them drives depreciation and taxes.
How are tenant improvements recorded? Capitalized as assets and amortized over the lease term, not expensed on completion.
Are security deposits income? No — liabilities held for tenants, returned or applied per the lease; recognizing them as income is a classic error.