Written for the person who owns the leases

Fitness operators

Large footprints, heavy plant, and a share of the pool that makes every error in it expensive.

The portfolio below is an illustration, not an average: change the sites, the footprint and the rate on the calculator and the arithmetic follows your own estate.

1. The arithmetic on a portfolio this size

   25 sites at 18,000 square feet and $6.00 per square foot is $2,700,000.00 of operating expenses billed in a year. At the $54,000.00 to $135,000.00 band typically recoverable on review, that is what a first pass puts at issue, before the years still open multiply it.

2. Parking lot: patch versus resurface

   Resurface versus patch, replace versus repair, unit installation versus service

3. Gross-up of fixed costs or wrong threshold

   Taxes, insurance and security grossed up; occupancy above the lease threshold

4. Tenant-metered space pooled into CAM

   Utilities for individually metered suites pooled into CAM

5. What your lease forms have in common

   A big box in a centre carries a large pro-rata share, so a denominator or a gross-up error costs more here than anywhere else. HVAC is the line to watch: the plant is worked hard, replacement is frequent, and a replacement expensed rather than amortised lands with your share attached.

6. Your portfolio will split three ways

   Some of your leases will let us act for you and take a share of what comes back, some bar it and are priced flat, and some bar a representative altogether and run in self-service with your team sending what we prepare. You get the split, site by site, with the clause reason for each, before anything is signed.

7. Start with five representative sites

   Pick five leases that look like the rest of the estate, send the lease and the last reconciliation for each, and you get the findings, the open years and the route per site. It is the fastest way to know whether the same error is on all of them.