With an average cost per square foot of $16.11, Stamford, Conn., is the most costly U.S. market for commercial real estate, according to a new study by the Building Owners and Managers Association International. New York and San Francisco are also among the nation's priciest markets.
Using the results from the BOMA 2013 Experience Exchange Report, the group 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. Stamford, Conn. $16.11 per square foot (psf)
2. New York $11.80 psf
3. Grand Rapids, Mich. $11.16 psf
4. Newark, N.J. $10.34 psf
5. San Francisco $9.66 psf
Five least expensive city-markets – total operating expenses:
1. Stockton, Calif. $3.57 psf
2. Fresno, Calif. $3.61 psf
3. Huntsville, Ala. $4.31 psf
4. Virginia Beach, Va. $4.64 psf
5. Albuquerque, N.M. $4.80 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.
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 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 psf
2. New York $39.00 psf
3. San Mateo, Calif. $34.96 psf
4. San Francisco $34.49 psf
5. Santa Monica, Calif. $34.04 psf
Five least expensive city-markets – total rental income:
1. Macon, Ga. $8.16 psf
2. Shreveport, La. $11.18 psf
3. Columbus, Ohio $12.09 psf
4. Huntsville, Ala. $12.81 psf
5. Little Rock, Ark. $12.81 psf
Total rental income includes rental income from office, retail and other space, such as storage areas.
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.
Related Stories
| Oct 23, 2014
Santiago Calatrava-designed church breaks ground in Lower Manhattan
Saturday marked the public "ground blessing" ceremony for the Saint Nicholas National Shrine, the Greek Orthodox Church destroyed on 9/11 by the collapse of the World Trade Center towers.
| Oct 23, 2014
Prehistory museum's slanted roof mimics archaeological excavation [slideshow]
Mimicking the unearthing of archaeological sites, Henning Larsen Architects' recently opened Moesgaard Museum in Denmark has a planted roof that slopes upward out of the landscape.
| Oct 23, 2014
China's 'weird' buildings: President Xi Jinping wants no more of them
During a literary symposium in Beijing, Chinese President Xi Jinping urged architects, authors, actors, and other artists to produce work with "artistic and moral value."
| Oct 22, 2014
Customization is the key in tomorrow's workplace
The importance of mobility, flexibility, and sustainability in the world of corporate design are already well-established. A newer trend that’s gaining deserved attention is customizability, and how it will look in the coming years, writes GS&P's Leith Oatman.
| Oct 21, 2014
Passive House concept gains momentum in apartment design
Passive House, an ultra-efficient building standard that originated in Germany, has been used for single-family homes since its inception in 1990. Only recently has the concept made its way into the U.S. commercial buildings market.
| Oct 21, 2014
Hartford Hospital plans $150 million expansion for Bone and Joint Institute
The bright-white structures will feature a curvilinear form, mimicking bones and ligament.
| Oct 21, 2014
Norman Foster, Zaha Hadid release plans for resorts in Nanjing and Wuhan, China
Jumeirah Group, a hotel group forming a part of investment group Dubai Holding, has chosen Zaha Hadid and Norman Foster to design two of three of its proposed resorts in Nanjing, Wuhan, and Haikou.
| Oct 21, 2014
Inside LEED v4: The view from the MEP engineering seats
Much of the spirited discussion around LEED v4 has been centered on the Materials & Resources Credit. At least one voice in the wilderness is shouting for greater attention to another huge change in LEED: the shift to ASHRAE 90.1-2010 as the new reference standard for Energy & Atmosphere prerequisites and credits.
| Oct 21, 2014
Perkins Eastman white paper explores state of the senior living industry in the Carolinas
Among the experts interviewed for the white paper, there was a general consensus that the model for continuing-care retirement communities is changing, driven by both the changing consumers and more prevalent global interest on the effects of aging.
| Oct 20, 2014
Singapore Sports Hub claims world's largest free-spanning dome
The retractable roof, which measures a whopping 1,017-feet across, is made from translucent ETFE plastic panels supported with metal rigging that arches over the main pitch.
