Building  Owners  and  Managers  Association  International

Building Owners and Managers Association International

New Research Identifies Most Expensive U.S. Commercial Real Estate Markets

December 7, 2011


New York City, Washington, D.C. and San Mateo, California Rank Highest in Rent

(WASHINGTON – December 7, 2011) The Building Owners and Managers Association (BOMA) International has identified the most expensive commercial real estate markets in the United States. The data is drawn from the 2011 Experience Exchange Report® (EER), which provides an annual analysis of the office building operating income and expense data compiled across approximately 940 million square feet of commercial office space in more than 6,500 buildings in 278 different markets. The 2011 report is based on operating income and expenses from from 2010.

The most expensive U.S. cities, based on total rental income, include:

1.New York, N.Y., $48.27 per square foot (psf)
2.Washington, D.C., $42.63 psf
3.San Mateo, Calif., $41.61 psf
4.Santa Monica, Calif., $36.67 psf
5.San Francisco, Calif., $34.86 psf
6.Boston, Mass., $31.15 psf
7.San Jose, Calif., $30.35 psf
8.Los Angeles, Calif., $27.97 psf
9.West Palm Beach, Fla., $27.71 psf
10.Chicago, Ill., $25.20 psf

Total rental income includes rental income from office, retail, and other space, which includes storage areas.  Amid the economic downturn in real estate markets, few markets demonstrated significant increases in rental income, suggesting that rental rates remain relatively stable and favorable for tenants seeking to pursue new leases or renegotiate existing ones. Among the most expensive cities, only New York and San Francisco showed increases in rental income.

Gauging most expensive cities on the basis of total operating and fixed expenses produces a slightly different list:

1.New York, N.Y., $21.44 psf
2.Washington, D.C., $16.86 psf
3.Boston, Mass., $15.16 psf
4.Morristown, N.J., $14.67 psf
5.San Francisco, Calif., $14.43 psf
6.Miami, Fla., $12.87 psf
7.Santa Monica, Calif., $12.84 psf
8.Plainfield, N.J., $12.83 psf
9.Chicago, Ill. and Los Angeles, Calif., 12.49 psf
10.Newark, N.J., $12.46 psf

Total operating expenses includes all expenses incurred to operate office buildings, including utilities, repairs/maintenance, cleaning, administrative, security and roads and grounds. Fixed expenses include real estate taxes, property taxes and insurance.  In New York, average total operating plus fixed expenses were $21.44 per square foot (psf), while in Los Angeles, they averaged $12.96 psf. Operating expenses increased in most markets in the last year. Fixed expenses were volatile, which could be attributed in part to rising utility costs as well as rising real estate taxes. While many cash-constrained cities and municipalities are looking to real estate for tax revenue, many property owners are contesting tax assessments because asset values have decreased due to the economic downturn.

The new data is based on BOMA’s 2011 Experience Exchange Report, the industry gold standard for benchmarking income and expense data in commercial building data. The report provides valuable analytic insight into the performance and efficiency of office buildings in markets in the U.S. and Canada.  The report includes trends analysis and city-market level reports, as well as reports for special use facilities such as medical office buildings, corporate facilities, financial buildings, agency managed and all electric buildings.


About BOMA International
The Building Owners and Managers Association (BOMA) International is an international federation of more than 100 local associations and affiliated organizations. Founded in 1907, its 16,500-plus members own or manage more than nine billion square feet of commercial properties. BOMA International’s mission is to enhance the human, intellectual and physical assets of the commercial real estate industry through advocacy, education, research, standards and information. On the Web at

Lindsay Tiffany
Manager of Media Relations
BOMA International
(202) 326-6365