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 6, 2013
3 dwellings designed with resiliency in mind
The CORE House, Shotgun Remix, and Resilient House were named the winners of the Designing Recovery competition, which aims to create housing with an ideal combination of disaster mitigation features and livability.
| Oct 4, 2013
Sydney to get world's tallest 'living' façade
The One Central Park Tower development consists of two, 380-foot-tall towers covered in a series of living walls and vertical gardens that will extend the full height of the buildings.
| Oct 4, 2013
Mack Urban, AECOM acquire six acres for development in LA's South Park district
Mack Urban and AECOM Capital, the investment fund of AECOM Technology Corporation (NYSE: ACM), have acquired six acres of land in downtown Los Angeles’ South Park district located in the central business district (CBD).
| Oct 4, 2013
CRB opens Atlanta office
Georgia’s status as a burgeoning hub for the life sciences industry has fueled CRB’s decision to open an office in Atlanta to better serve its clients in the market. CRB is a leading provider of engineering, design and construction services for customers in the biotech, pharmaceutical and life sciences industries.
| Oct 2, 2013
40 Under 40 retrospective: Where are they now?
BD+C catches up with two past 40 Under 40 honorees: a designer who credits trapeze work with boosting her confidence, and a security expert who also knows a lot about squash.
| Oct 2, 2013
Corporate HQ in 10 months made possible with BIM coordination
An integrated Building Team uses BIM/VDC to convert a 1940s-era industrial building into a flashy new headquarters for Hillshire Brands in a matter of months.
| Oct 1, 2013
13 structural steel buildings that dazzle
The Barclays Center arena in Brooklyn and the NASCAR Hall of Fame in Charlotte, N.C., are among projects named 2013 IDEAS2 winners by the American Institute of Steel Construction.
| Oct 1, 2013
Federal government shutdown: What it means to AEC firms
The American Institute of Architects has issued a statement and FAQs document following the partial federal government shutdown that began early this morning.
| Oct 1, 2013
OSHA’s top 10 violations for 2013
Fall protection tops the list of the Occupational Safety and Health Administration’s most-cited workplace safety violations.
| Oct 1, 2013
Last chance! Three 'scholarships' left for BD+C Under40 Leadership Summit
Free registration for selected "young superstars" for BD+C's Under40 Leadership Summit in San Francisco, Oct 9-11, 2013
