Hearst, one of the nation’s largest diversified media, information and services companies with more than 360 businesses, today announced that the Hearst Tower in New York City has been recognized by The Council on Tall Buildings and Urban Habitat (CTBUH) with its prestigious 10 Year Award. The Tower, which was designed by Pritzker-Prize winning architect […]
Using results from the 2012 Experience Exchange Report (EER), The Building Owners and Managers Association (BOMA) International, 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. $9.66 psf
3. Washington, D.C. $9.51 psf
4. Santa Monica, Calif. $8.54 psf
5. San Jose, Calif. $8.47 psf
Five least expensive city-markets – Total operating expenses:
1. Salt Lake City, Utah $4.87 per square foot (psf)
2. Atlanta, Ga. $5.57 psf
3. Phoenix, Ariz. $5.60 psf
4. Cincinnati, Ohio $5.69 psf
5. Nashville, Tenn. $5.69 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, 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. $39.00 psf
3. San Mateo, Calif. $34.96 psf
4. San Francisco, Calif. $34.49 psf
5. Santa Monica, Calif. $34.04 psf
Five least expensive city-markets – Total rental income:
1. Columbus, Ohio $12.09 per square foot (psf)
2. Tucson, Ariz. $13.86 psf
3. Saint Louis, Mo. $14.51 psf
4. Cincinnati, Ohio $16.35 psf
5. Atlanta, Ga. $16.89 psf
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.