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
Sponsored | Steel Buildings | Jan 25, 2022
Multifamily + Hospitality: Benefits of building in long-span composite floor systems
Long-span composite floor systems provide unique advantages in the construction of multi-family and hospitality facilities. This introductory course explains what composite deck is, how it works, what typical composite deck profiles look like and provides guidelines for using composite floor systems. This is a nano unit course.
Urban Planning | Jan 25, 2022
Retooling innovation districts for medium-sized cities
This type of development isn’t just about innovation or lab space; and it’s not just universities or research institutions that are driving this change.
Sponsored | Resiliency | Jan 24, 2022
Norshield Products Fortify Critical NYC Infrastructure
New York City has two very large buildings dedicated to answering the 911 calls of its five boroughs. With more than 11 million emergency calls annually, it makes perfect sense. The second of these buildings, the Public Safety Answering Center II (PSAC II) is located on a nine-acre parcel of land in the Bronx. It’s an imposing 450,000 square-foot structure—a 240-foot-wide by 240-foot-tall cube. The gleaming aluminum cube risesthe equivalent of 24 stories from behind a grassy berm, projecting the unlikely impression that it might actually be floating. Like most visually striking structures, the building has drawn as much scorn as it has admiration.
Sponsored | Resiliency | Jan 24, 2022
Blast Hazard Mitigation: Building Openings for Greater Safety and Security
Coronavirus | Jan 20, 2022
Advances and challenges in improving indoor air quality in commercial buildings
Michael Dreidger, CEO of IAQ tech startup Airsset speaks with BD+C's John Caulfield about how building owners and property managers can improve their buildings' air quality.
Building Owners | Jan 17, 2022
Success from within: Three characteristics of effective owner project planning
Setting realistic expectations for project teams can help owners avoid common pitfalls.
Sponsored | BD+C University Course | Jan 12, 2022
Total steel project performance
This instructor-led video course discusses actual project scenarios where collaborative steel joist and deck design have reduced total-project costs. In an era when incomplete structural drawings are a growing concern for our industry, the course reveals hidden costs and risks that can be avoided.
University Buildings | Jan 11, 2022
Designing for health sciences education: supporting student well-being
While student and faculty health and well-being should be a top priority in all spaces within educational facilities, this article will highlight some key considerations.
Green | Jan 10, 2022
The future of regenerative building is performance-based
Why measuring performance results is so critical, but also easier said than done.
Urban Planning | Dec 15, 2021
EV is the bridge to transit’s AV revolution—and now is the time to start building it
Thinking holistically about a technology-enabled customer experience will make transit a mode of choice for more people.