Gym and fitness studio lease: why your CAM is higher than the anchor tenant's
Fitness studios and gyms occupy a frustrating position in many shopping centers. You drive significant foot traffic. Your members park frequently, visit multiple times per week, and increase the center's visible activity. Yet in many strip malls and power centers, your CAM per square foot is materially higher than the big-box anchor tenant's.
Here's the thing: that disparity is often intentional. It's built into the lease structure. The question is whether it's as large as your landlord says it should be.
Anchor tenant exclusion: A lease provision that excludes the square footage of a major anchor tenant (such as a grocery store, big-box retailer, or department store) from the pro-rata denominator used to calculate smaller tenants' CAM obligations. Because anchor tenants often negotiate their own reduced or excluded CAM obligations, their absence from the denominator shifts the full cost burden to inline tenants.
Why anchor exclusions affect your CAM
Most shopping centers with anchor tenants have negotiated separate CAM arrangements with those anchors. A grocery store anchor or a Target might pay a fixed CAM amount, negotiate a separate operating expense structure, or exclude certain cost categories entirely. In many cases, the anchor's square footage is excluded from the denominator used to calculate other tenants' shares.
That exclusion has a direct mathematical effect: when a 40,000 square foot anchor is removed from a 100,000 square foot center's denominator, the remaining 60,000 square feet of inline tenants share 100% of the costs. Your 5,000 square foot fitness studio goes from representing 5% of the center to representing 8.3% of the denominator.
That's a 66% increase in your share, not because you use 66% more of the parking lot or common area, but because the anchor's lease negotiated them out of the denominator.
Whether that is appropriate depends entirely on your lease. If your lease defines your pro-rata share including the anchor exclusion, this is the expected calculation. If your lease defines pro-rata as your square footage divided by total leasable area without the exclusion, the landlord's calculation may be wrong.
The issue that creates recoverable overcharges is when the exclusion treatment changes without a corresponding lease amendment. If an anchor departs and the landlord restructures the denominator differently from what your lease specifies, your share may shift in a way that's not supported by your lease language.
Parking lot maintenance: the major CAM item for gyms
Fitness members visit more frequently than typical retail shoppers. A member who comes to the gym four times per week generates more parking events in a year than a grocery shopper who visits twice a week. This generates wear on the parking surface, markings, and lighting that is disproportionate to your square footage.
Some landlords attempt to reflect this in their CAM allocation. Whether they are allowed to do so depends on your lease.
If your lease defines CAM as shared equally by pro-rata square footage, a landlord cannot impose a higher parking allocation on a fitness tenant just because of higher parking utilization. The method of allocation is what the lease says, not what the landlord thinks is fair.
The CAM line items to focus on for fitness tenants:
Parking lot maintenance and repair. Sealcoating, restriping, patching, and major resurfacing. Confirm whether repair costs are expensed in the current year or amortized under your lease's capital expense provisions.
Exterior lighting. High-traffic sites often have extended operating hours for lighting. If the fitness studio is open from 5 AM to 11 PM and the rest of the center closes at 9 PM, the landlord may argue that lighting costs are higher due to your hours. Whether those costs belong in the shared pool or should be billed to you directly depends on the lease.
Snow removal and landscaping. Standard shared expenses. The amounts should be consistent with prior years unless there were unusual weather events.
HVAC costs in fitness center leases: a common confusion
Gyms and fitness studios have high HVAC demands. Members generate heat. Equipment generates heat. Shower and locker room areas require ventilation. Depending on how the building's HVAC is structured, your unit's HVAC may be:
- Dedicated rooftop units serving only your space (tenant responsibility, not in CAM)
- Part of a central building system with cost allocated through CAM
- A hybrid where shared systems serve common areas and dedicated units serve tenant spaces
The confusion arises when landlords include portions of HVAC operating costs in the CAM pool in ways that don't reflect how the systems are actually configured. If your dedicated rooftop units are listed as building systems in the reconciliation, you may be paying CAM for your own HVAC on top of your direct utility costs.
Review your lease's HVAC provisions. Identify whether your HVAC is tenant-dedicated or building-shared. Compare to what appears in the CAM statement.
More on that below when we cover the full review checklist.
"Fitness studio owners negotiate hard on base rent and build-out allowances. Then they accept CAM at face value for five years. The pro-rata denominator and anchor exclusion issues alone often exceed what they saved on rent." — Angel Campa, Founder of CAMAudit
Management fee and admin fee stacking for fitness tenants
The management fee errors that affect all commercial tenants appear in fitness studio leases too. A 5% fee cap with a 4.5% management fee plus 1.5% administrative fee creates a 6% combined charge that exceeds a 5% cap.
For a fitness studio with $120,000 in annual CAM exposure and a 1% management fee excess, the recoverable amount is $1,200 per year. Over a three-year lookback, that's $3,600 for one line item error.
What to audit in a gym or fitness studio CAM statement
Step 1: Verify the pro-rata denominator. Request the rent roll. Confirm the total leasable area and whether the anchor exclusion matches your lease's definition.
Step 2: Check management and admin fees. Add up all fee-related line items. Compare to your lease cap.
Step 3: Review parking-related costs. Identify parking maintenance and repair line items. Check whether large items should be amortized.
Step 4: Clarify HVAC line items. If HVAC costs appear in CAM, confirm whether these represent shared central systems or dedicated tenant equipment.
Step 5: Confirm your lease's exclusion list. Check that capital expenditures, leasing commissions, and landlord overhead items are not in the reconciliation.
Step 6: Year-over-year comparison. Any line item with more than a 10% increase from last year without explanation is worth requesting documentation for.
Upload your reconciliation to CAMAudit for a free scan at CAMAudit.
Questions gym owners ask about fitness studio CAM
Frequently Asked Questions
Why does my gym pay higher CAM per square foot than the anchor store?
Anchor tenants often negotiate their square footage out of the pro-rata denominator. This shifts the full cost burden to inline tenants including fitness studios. Whether this is appropriate depends on your lease's specific pro-rata definition.
Can my landlord charge me more CAM because of my parking demand?
If your lease defines pro-rata share by square footage, the landlord cannot unilaterally impose a higher parking allocation. The lease method of allocation controls. A lease amendment would be required to change it.
Is the HVAC for my fitness studio in CAM or my own responsibility?
It depends on whether your HVAC systems are dedicated to your space or part of a central building system. Review your lease's HVAC provisions and compare to the reconciliation to determine which category applies.
What happens to my CAM when the anchor tenant leaves the center?
When an anchor leaves, the remaining tenant distribution changes. How this affects your pro-rata share depends on how your lease defines the denominator and how the landlord adjusts for the vacancy. If the denominator changes in a way your lease doesn't support, that's an audit finding.
How long do I have to contest last year's CAM charges?
Most leases provide 12 months from receipt of the annual reconciliation. Some extend to 18 or 24 months. Check your audit rights clause for the specific window in your lease.
Sources
- International Health, Racquet and Sportsclub Association (IHRSA). Fitness industry operational data. https://www.ihrsa.org/
- IREM (Institute of Real Estate Management). Commercial tenant operating expense resources. https://www.irem.org/
- International Council of Shopping Centers. NNN lease and anchor tenant exclusion resources. https://www.icsc.com/
- Tango Analytics. "CAM Reconciliation: Why tenants should verify the math." https://tangoanalytics.com/blog/cam-reconciliation/
Upload your fitness studio CAM statement to CAMAudit for a free scan and see which line items in your reconciliation may not match your lease terms.