West Pomona shopping mall consists of a total area of 5 million square feet. Mac

Question

West Pomona shopping mall consists of a total area of 5 million square feet. Macy’s, Nordstrom, and JC Penney are its anchors, and they each occupy 500,000 square feet of space. Each is paying $0.75 per usable square foot in CAM charges. In-line tenants occupy 3.1 million square feet. The remainder is common area, which the landlord believes will require $11 per square foot to maintain and operate each year.

If the retail mall’s owner would like to recover all CAM expenses from its tenants, how much will in-line tenants have to pay per square foot of their usable space for the CAM charges?

Explanation / Answer

Total area: 5 million sq.ft.

Anchors occupy a total of 1.5 million sq.ft

Total CAM charges which are to be paid by anchors: 0.75*1.5= $1.125 million

The total area occupied by Tenants: 3.1 million sq.ft.

Common area: 0.4 million sq.ft.

Total CAM charges of common area: 11*0.4= $4.4 million

Thus total charges=4.4+1.125= $5.525 million.

Per sq ft charges for tentants if charges are to be recovered by tentants: 5.525/3.1= $1.7822/sq.ft

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