Final answer:
Bob's shoe store's annual payment for common area maintenance depends on their lease agreement and their pro-rata share of the total space. It is calculated by applying their percentage of the space to the total CAM costs stipulated in the lease.
Step-by-step explanation:
To determine what Bob's shoe store pays annually on common area maintenance (CAM), you would need to review the lease agreement details. CAM charges are often outlined in a commercial lease agreement, and they include the costs associated with maintaining shared spaces in commercial properties, such as parking lots, hallways, and landscaping. This cost is typically shared among tenants based on the proportion of the total space they occupy. To calculate the annual CAM payment, Bob's shoe store would take its pro-rata share, which is the percentage of the shopping center's total space that it occupies, and apply that percentage to the total CAM costs. For instance, if the store occupies 10% of the shopping center and the total CAM fee is $100,000 annually, Bob's shoe store would pay $10,000 per year. This information should be explicitly defined in the lease documents.
The complete question is:
A lease for Bob's Shoe Store includes a common area maintenance clause. The store occupies 2,500 square feet of GLA in a shopping center that has 500,000 square feet of GLA. There are 20,000 square feet of common areas and annual CAM costs are $3 per square foot. What will Bob's Shoe Store pay annually for common area maintenance?