The Building Owners and Managers Association (BOMA) International has identified the most expensive commercial real estate markets in the U.S. The data is drawn from the 2011 Experience Exchange Report (EER), which provides an annual analysis of the office building operating income and expense data compiled across approximately 940 million square feet of commercial office space in more than 6,500 buildings in 278 different markets. The 2011 report is based on operating income and expenses from 2010.
The most expensive U.S. cities, based on total rental income, include:
- New York, N.Y., $48.27 per square foot (psf)
- Washington, D.C., $42.63 psf
- San Mateo, Calif., $41.61 psf
- Santa Monica, Calif., $36.67 psf
- San Francisco, Calif., $34.86 psf
- Boston, Mass., $31.15 psf
- San Jose, Calif., $30.35 psf
- Los Angeles, Calif., $27.97 psf
- West Palm Beach, Fla., $27.71 psf
- Chicago, Ill., $25.20 psf
Total rental income includes rental income from office, retail, and other space, which includes storage areas.Ā Amid the economic downturn in real estate markets, few markets demonstrated significant increases in rental income, suggesting that rental rates remain relatively stable and favorable for tenants seeking to pursue new leases or renegotiate existing ones. Among the most expensive cities, only New York and San Francisco showed increases in rental income.
Gauging most expensive cities on the basis of total operating and fixed expenses produces a slightly different list:
- New York, N.Y., $21.44 psf
- Washington, D.C., $16.86 psf
- Boston, Mass., $15.16 psf
- Morristown, N.J., $14.67 psf
- San Francisco, Calif., $14.43 psf
- Miami, Fla., $12.87 psf
- Santa Monica, Calif., $12.84 psf
- Plainfield, N.J., $12.83 psf
- Chicago, Ill. and Los Angeles, Calif., 12.49 psf
- Newark, N.J., $12.46 psf
Total operating expenses includes all expenses incurred to operate office buildings, including utilities, repairs/maintenance, cleaning, administrative, security and roads and grounds. Fixed expenses include real estate taxes, property taxes and insurance.Ā In New York, average total operating plus fixed expenses were $21.44 per square foot (psf), while in Los Angeles, they averaged $12.96 psf. Operating expenses increased in most markets in the last year. Fixed expenses were volatile, which could be attributed in part to rising utility costs as well as rising real estate taxes. While many cash-constrained cities and municipalities are looking to real estate for tax revenue, many property owners are contesting tax assessments because asset values have decreased due to the economic downturn. BD+C
Related Stories
Architects | Mar 17, 2019
HMC Architects sets up a ādesign labā to explore new ideas
The goal is for project team members to collaborate earlier to inspire innovation.
Architects | Mar 12, 2019
Thrown a curve: Fitting a restaurant into spherical dome was the design challenge for Willmottās Ghost
The Seattle eatery nests inside the conservatories on Amazonās massive campus.
Building Technology | Mar 8, 2019
What is your firm's innovation 'hit rate'?
As firms begin to adopt the practices and mindset of Silicon Valley tech and advanced manufacturing, itās fair to ask: Are all of these innovation projects and initiatives working?
Architects | Mar 7, 2019
HED, Integrated Design Group to merge firms
ID has a strong reputation for data center design with locations in Boston in Dallas.
Architects | Mar 5, 2019
Arata Isozaki named 2019 Pritzker Architecture Prize Laureate
The Japanese architect, city planner, and theorist is known for his deep commitment to the āart of spaceā and transnational methodology.
Education Facilities | Feb 25, 2019
Fallingwater Instituteās summer residency programs have a new educational hub
Bohlin Cywinski Jackson designed the project.
Architects | Feb 14, 2019
Amazon will not build HQ2 in New York City
The tech giant walks away from a deal, succumbing to opposition over huge tax breaks.
Architects | Feb 12, 2019
The basics of building commissioning
As building system technology increases in complexity and sustainability remains at the forefront of design, the need for commissioning continues to rise. This is the first post in our series examining the basics, benefits and boundaries of building commissioning.
Architects | Jan 28, 2019
9 tech trends to track in 2019
Innovations in voice recognition, cognitive neuroscience, and biometrics are among the trending tech topics for 2019, according to CallisonRTKL's Kristin Tilley.
AEC Tech | Jan 9, 2019
Our robotic future: Assessing AI's impact on the AEC profession and the built environment
This is the first in a series by Lance Hosey, FAIA, on how automation is disrupting design and construction.