Building  Owners  and  Managers  Association  International

Building Owners and Managers Association International

BOMA International Data Identifies Most, Least Expensive Commercial Real Estate Markets

August 28, 2014

FOR IMMEDIATE RELEASE
 
(WASHINGTON, D.C. – August 28, 2014) The Building Owners and Managers Association (BOMA) International, using the results from the 2014 Experience Exchange Report® (EER®), has compiled a list of the most and least expensive commercial real estate city-markets in the United States.  The annual report aggregates income and expense data from the previous year; 2013 data was gathered from more than 5,700 buildings across 250 markets representing more than a billion square feet of space in the United States and Canada.
 
Total operating expenses incorporate all expenses incurred to operate office buildings, including utilities, repairs and maintenance, roads and grounds, cleaning, administration and security.  All five of the most expensive markets for operating expenses remained unchanged from the previous year’s rankings, with New York once again topping the list with average total operating expenses of $11.77 per square foot.  At $5.17 per square foot, Raleigh, North Carolina, replaced Salt Lake City in 2013 as the market with the lowest reported operating expenses.  Overall operating expenses saw a slight increase in 2013, as the industry began to recover and previously intensive cost-cutting measures were relaxed.

Five Most Expensive Markets – Total Operating Expenses:
​1. New York, New York $11.77 per square foot (psf)​
2. San Francisco, California ​$10.09 psf
3. Washington, D.C. ​$9.63 psf
4. Santa Monica, California ​$9.62 psf
​5. San Jose, California ​$8.96 psf

Five Least Expensive Markets – Total Operating Expenses:
​1. Raleigh, North Carolina $5.17 per square foot (psf)​
2. Salt Lake City, Utah ​$5.39 psf
3. Orlando, Florida ​$6.01 psf
4. Dallas, Texas ​$6.03 psf
​5. Nashville, Tennessee ​$6.08 psf

​Total rental income includes rental income from office, retail and other space, such as storage areas. While Huntsville, Alabama saw an average total rental income per square foot of $12.89 in 2013, on the opposite end of the spectrum, New York averaged a total income rate of more than four times that amount at $51.67. Washington, D.C., the top commercial real estate market for rental income in 2012, dropped to second place in 2013 with an average total rental income of $45.24 per square foot; however, the D.C. market still saw a year-over-year increase in rental income of nearly one dollar per square foot. Overall rental income increased in 2013, signaling continued economic recovery in the commercial real estate industry.

Five Most Expensive Markets – Total Rental Income:
​1. New York, New York $51.67 per square foot (psf)​
2. Washington, D.C. ​$45.24 psf
3. San Mateo, California ​$42.71 psf
4. Santa Monica, California ​$38.64 psf
​5. Boston, Massachusetts ​$35.37 psf

Five Least Expensive Markets – Total Rental Income:
​1. Huntsville, Alabama $12.89 per square foot (psf)​
2. Tucson, Arizona ​$13.22 psf
3. Columbus, Ohio ​$15.92 psf
4. Saint Louis, Missouri       ​$16.42 psf
​5. Phoenix, Arizona ​$16.63 psf

The Experience Exchange Reportis the largest and most comprehensive benchmarking tool in the commercial real estate industry, with a database that has three times more office building data than comparable sources and the most medical office building data. An EER subscription allows users to generate customized reports online using a host of search filters, including building size, type, class, location market, submarket and more, and calculates results in real time.  Reports are easily downloadable as both Excel and PDF documents, and a subscription grants unlimited access; there is no limit to the number of reports users can generate.  Visit eer.boma.org to learn more.
 
***
 
About BOMA International
The Building Owners and Managers Association (BOMA) International is a federation of 93 BOMA U.S. associations and 17 international affiliates.  Founded in 1907, BOMA represents the owners and managers of all commercial property types including nearly 10 billion square feet of U.S. office space that supports 3.7 million jobs and contributes $205 billion to the U.S. GDP.  Its mission is to advance a vibrant commercial real estate industry through advocacy, influence and knowledge.  Learn more at www.boma.org.
 
Contact
Courtney C. McKay
Manager of Communications & Marketing
BOMA International 
(202) 326-6352
​​​