FOR IMMEDIATE RELEASE*
(WASHINGTON, D.C. – August 27, 2013) The Building Owners and Managers Association (BOMA) International, using the results from the 2013 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 2012, data was gathered from more than 5,300 buildings across 250 markets and 115 cities in the United States and Canada.
Five most expensive city-markets – Total operating expenses:
|1. New York, N.Y.
||$11.80 per square foot (psf)|
|2. San Francisco, Calif.
|3. Washington, D.C.
|4. Santa Monica, Calif.
|5. San Jose, Calif.
Five least expensive city-markets – Total operating expenses:
|1. Salt Lake City, Utah
||$4.87 per square foot (psf)|
|2. Atlanta, Ga.
|3. Phoenix, Ariz.
|4. Cincinnati, Ohio
|5. Nashville, Tenn.
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, average total operating expenses were $11.80 per square foot (psf), while they averaged just $4.87 psf in Salt Lake City. There was a 3.9 percent overall decrease in total operating expenses from 2011 to 2012, underscoring an industry focus on maximizing building efficiency in the face of dwindling income streams. For example, New York, which also topped the list of most expensive markets for operating expenses last year, saw a decrease of $0.66 per square foot.
Five most expensive city-markets – Total rental income:
|1. Washington, D.C.
||$44.30 per square foot (psf)|
|2. New York, N.Y.
|3. San Mateo, Calif.
|4. San Francisco, Calif.
|5. Santa Monica, Calif.
Five least expensive city-markets – Total rental income:
|1. Columbus, Ohio
||$12.09 per square foot (psf)|
|2. Tucson, Ariz.
|3. Saint Louis, Mo.
|4. Cincinnati, Ohio
|5. Atlanta, Ga.
Total rental income includes rental income from office, retail and other space, such as storage areas. While Columbus, Ohio had a total rental income per square foot of $12.09, on the opposite end of the spectrum, Washington, D.C. averaged a total income rate of more than three times that amount at $44.30. While average rental income has dropped somewhat, decreasing 2.9 percent from 2011 to 2012, building owners and managers are compensating for these income losses with greater reductions in expenses.
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 select multiple cities to generate state and regional reports. It also offers the capability to search by building size, height, age and more for broader analysis. Subscriptions are available at www.bomaeer.com
About BOMA International
The Building Owners and Managers Association (BOMA) International is a federation of 93 BOMA U.S. associations, BOMA Canada and its 11 regional associations and 13 BOMA 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 the interests of the entire commercial real estate industry through advocacy, education, research, standards and information. Find BOMA online at www.boma.org
Courtney C. McKay
Manager of Communications & Marketing
*Correction of release dated August 22, 2013.