Building  Owners  and  Managers  Association  International

Building Owners and Managers Association International

New Benchmark Data Identifies Top Five Most Least Expensive Commercial Real Estate Markets

August 23, 2012

FOR IMMEDIATE RELEASE

 

New York City, San Francisco, and Washington, D.C. Rank Highest in Operating Expenses, Rental Income; Jackson, Miss. and Shreveport, La. Rank Among the Lowest 

(WASHINGTON – August 23, 2012)  The Building Owners and Managers Association (BOMA) International, using the results from the 2012 Experience Exchange Report® (EER), compiled a list of the most and least expensive commercial real estate city-markets in the United States. The annual report aggregates rental income and operating expense figures from the previous year; in 2011, data was gathered from more than 5,400 buildings across 250 distinct markets.

​Five most expensive city-markets - Total operating expenses: ​
​1. New York, N.Y.: ​$12.46 per square foot (psf)
​2. San Francisco, Calif.: ​$10.49 psf
​3. Washington, D.C.: ​$10.18 psf
​4. Boston, Mass.: ​$9.21 psf
​5. Los Angeles, Calif.: ​$8.96 psf

 

​Five least expensive city-markets -Total operating expenses: ​
​1. Jackson, Miss.: ​$4.71 per square foot (psf)
​2. Fresno, Calif.: ​$4.78 psf
​3. Salt Lake City, Utah: ​$5.01 psf
​4. Virginia Beach, V.A.: ​$5.11 psf
​5. Shreveport, L.A.: ​$6.17 psf

 

Total operating expenses incorporate all expenses incurred to operate office buildings, including utilities, repairs and maintenance, roads and grounds, cleaning, administration and security. Fixed expenses include real estate taxes, property taxes and insurance.  In New York City, average total operating plus fixed expenses were $12.46 per square foot (psf), while they averaged just $4.71 psf in Jackson, Miss. Operating expenses increased in most markets in the last year, but rent-based income and overall income also saw increases, which helped insulate building owners and managers as their profits continue to gradually return.

​Five most expensive city-markets - Total rental income: ​
​1. New York, N.Y.: ​$45.14 per square foot (psf)
​2. Washington, D.C.: ​$44.10 psf
​3. Boston, Mass.: ​$35.51 psf
​4. San Francisco, Calif.: ​$34.24 psf
​5. San Mateo, Calif.: ​$33.80 psf

 

​Five least expensive city-markets - Total rental income: ​
​1. Shreveport, L.A.: ​$11.76 per square foot (psf)
​2. Dayton, Ohio: ​$11.79 psf
​3. Harrisburg, Penn.: ​$13.41 psf
​4. Saint Louis, M.O.: ​$15.35 psf
​5. Nashville, Tenn.: ​$15.54 psf

 

Total rental income includes rental income from office, retail, and other space, such as storage areas. As the commercial real estate market continues its recovery, most areas are seeing meaningful increases in rental income, suggesting that tenants may begin to see rental rates increase as building owners become more confident in their earning potential. In Shreveport, La., total rental income increased by 13.8 percent from 2010 to 2011, while, among the most expensive cities, only San Francisco showed a decrease in rental income.

The Experience Exchange Report is the premier income and expense data benchmarking tool for the commercial real estate industry. The EER allows users to conduct multi-year analysis of single markets and special use facilities such as medical office buildings, corporate facilities, financial buildings, agency-managed properties and all-electric buildings.

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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. Find BOMA on the Web at www.boma.org.

Contact
Courtney C. McKay
Manager of Communications & Marketing
BOMA International
(202) 326-6352
cmckay@boma.org