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. 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. 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
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.
Architects | Dec 17, 2018
New toolkit helps architect achieve high-performance buildings
Architects can download a copy of the toolkit online.
Architects | Dec 13, 2018
Social media synergy: Revving up your AEC firm’s content engine
Design firms know that just having a website and a blog aren’t enough, but social media complicates how they communicate.
Architects | Dec 10, 2018
The art and science of drawing: Humanizing the design process with a bit of controlled mayhem
Hand drawing reveals a dimension beyond those available in a CAD drawing or digital rendering.
Architects | Dec 7, 2018
2019 AIA Gold Medal awarded to Lord Richard Rogers, Hon. FAIA
The Gold Medal honors an individual whose significant body of work has had a lasting influence on the theory and practice of architecture.
3D Printing | Dec 7, 2018
Additive manufacturing heads to the jobsite
Prototype mobile 3D printing shop aims to identify additive manufacturing applications for construction jobsites.
Architects | Dec 6, 2018
Payette honored with 2019 AIA Architecture Firm Award
The award recognizes a firm that has consistently produced distinguished architecture for at least 10 years.
Biophilic Design | Nov 19, 2018
Biophilic design: What is it? Why it matters? And how do we use it?
As we continue to move toward the city and spend more time indoors, our day-to-day interaction with quality nature is shrinking. One contemporary concept to reverse this effect is biophilic design, a strategic approach to tap into—and harness—nature in the built environment.
Architects | Nov 6, 2018
Kohn Pedersen Fox opens three new offices
Following exciting current work, new commissions, and upcoming opportunities, global architecture firm embraces the future with new outposts.
Architects | Oct 2, 2018
Gensler, in latest report, highlights where resilient design could make the greatest impact on the built environment
The firm showcases its own recent projects as demonstrations for what can work in six areas.