Rent presumably, and other expenses, will be on the high side in Cambridge, but you have population density on your side. I agree with Harris that aspects of access are very important (mass transit, parking, safety, etc). And yes, absolutely, a review of your competition is helpful. Make sure to look at other stand alone studios, as well as health clubs. And if you are in a student heavy area remember to see what other options are available for them. See if you can get some data on residential/business in your area. A residential area that has a high median income will have more possibilities for mid morning classes, while an area with lots of businesses might make lunch classes a draw.
Do you already have a following in the area on which to build? The most successful Pilates/barre studio I know was started by two women, one of whom was one of the most popular teachers in the area already, and had the following in a demographic that had plenty of money and a readiness to follow her to a space where they would pay more for her class. Even if the demographics are all right having a ready base is really helpful when you move out into your own space.