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
| Nov 3, 2010
Designs complete for new elementary school
SchenkelShultz has completed design of the new 101,270-sf elementary Highlands Elementary School, as well as designs for three existing buildings that will be renovated, in Kissimmee, Fla. The school will provide 48 classrooms for 920 students, a cafeteria, a media center, and a music/art suite with outdoor patio. Three facilities scheduled for renovations total 19,459 sf and include an eight-classroom building that will be used as an exceptional student education center, a older media center that will be used as a multipurpose building, and another building that will be reworked as a parent center, with two meeting rooms for community use. W.G. Mills/Ranger is serving as CM for the $15.1 million project.
| Nov 3, 2010
Chengdu retail center offers a blend of old and new China
The first phase of Pearl River New Town, an 80-acre project in Chengdu, in China’s Wenjiang District, is under way along the banks of the Jiang’an River. Chengdu was at one time a leading center for broadcloth production, and RTKL, which is overseeing the project’s master planning, architecture, branding, and landscape architecture, designed the project’s streets, pedestrian pathways, and bridges to resemble a woven fabric.
| Nov 3, 2010
Rotating atriums give Riyadh’s first Hilton an unusual twist
Goettsch Partners, in collaboration with Omrania & Associates (architect of record) and David Wrenn Interiors (interior designer), is serving as design architect for the five-star, 900-key Hilton Riyadh.
| Nov 3, 2010
Virginia biofuel research center moving along
The Sustainable Energy Technology Center has broken ground in October on the Danville, Va., campus of the Institute for Advanced Learning and Research. The 25,000-sf facility will be used to develop enhanced bio-based fuels, and will house research laboratories, support labs, graduate student research space, and faculty offices. Rainwater harvesting, a vegetated roof, low-VOC and recycled materials, photovoltaic panels, high-efficiency plumbing fixtures and water-saving systems, and LED light fixtures will be deployed. Dewberry served as lead architect, with Lord Aeck & Sargent serving as laboratory designer and sustainability consultant. Perigon Engineering consulted on high-bay process labs. New Atlantic Contracting is building the facility.
| Nov 3, 2010
Dining center cooks up LEED Platinum rating
Students at Bowling Green State University in Ohio will be eating in a new LEED Platinum multiuse dining center next fall. The 30,000-sf McDonald Dining Center will have a 700-seat main dining room, a quick-service restaurant, retail space, and multiple areas for students to gather inside and out, including a fire pit and several patios—one of them on the rooftop.
| Nov 2, 2010
11 Tips for Breathing New Life into Old Office Spaces
A slowdown in new construction has firms focusing on office reconstruction and interior renovations. Three experts from Hixson Architecture Engineering Interiors offer 11 tips for office renovation success. Tip #1: Check the landscaping.
| Nov 2, 2010
Cypress Siding Helps Nature Center Look its Part
The Trinity River Audubon Center, which sits within a 6,000-acre forest just outside Dallas, utilizes sustainable materials that help the $12.5 million nature center fit its wooded setting and put it on a path to earning LEED Gold.
| Nov 2, 2010
A Look Back at the Navy’s First LEED Gold
Building Design+Construction takes a retrospective tour of a pace-setting LEED project.
| Nov 2, 2010
Wind Power, Windy City-style
Building-integrated wind turbines lend a futuristic look to a parking structure in Chicago’s trendy River North neighborhood. Only time will tell how much power the wind devices will generate.
| Nov 2, 2010
Energy Analysis No Longer a Luxury
Back in the halcyon days of 2006, energy analysis of building design and performance was a luxury. Sure, many forward-thinking AEC firms ran their designs through services such as Autodesk’s Green Building Studio and IES’s Virtual Environment, and some facility managers used Honeywell’s Energy Manager and other monitoring software. Today, however, knowing exactly how much energy your building will produce and use is survival of the fittest as energy costs and green design requirements demand precision.
