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
Architects | Oct 21, 2016
NASA Orbit Pavilion to debut at The Huntington Library at the end of October
The pavilion uses sound to represent the movement of the International Space Station and 19 earth satellites.
Higher Education | Oct 20, 2016
Designing innovative campuses for tomorrow's students
Planning for places that foster effective innovation is still an emerging process, but the constant pressure on universities to do so continues from two of their key institutional constituencies—students and employers, writes Perkins+Will's Ken Higa and Josh Vel.
Data Centers | Oct 14, 2016
Where data centers meet design
As technology continues to evolve, we have to simultaneously adapt and help our clients think beyond the short term, writes Gensler's Martin Gollwitzer.
Architects | Oct 13, 2016
Dallas architects recognized at 2016 AIA Dallas Built Design Awards
Six Texas-based projects lauded for design excellence.
Architects | Oct 11, 2016
A good imagination and a pile of junk: How maker culture is influencing the way AEC firms solve problems
“Fail” is no longer a dirty four-letter word: for maker culture, it has become a crucial stop along the way
Architects | Oct 4, 2016
Video blog: How to future-proof your workplace
Larry Lander, a Principal with PDR and a registered architect, discusses how modularity can improve a workplace for the business and the individual.
Architects | Sep 30, 2016
Ugly soviet parking garage takes on appearance of a cascading waterfall
Architect Ignas Lukaskas worked in conjunction with Vieta and the Vilnius Street Art festival to transform the building.
Architects | Sep 30, 2016
HOK partners with Delos to accredit its designers as wellness professionals
They are also working on the first WELL-certified city district, in Tampa, Fla.
Architects | Sep 29, 2016
Join Adrian Smith + Gordon Gill Architecture’s partners Adrian Smith, Gordon Gill, and Robert Forest for “AS+GG At Ten”
The event is a presentation of their work spanning the past 10 years.
Architects | Sep 29, 2016
Design culture in Dubai draws increased international attention
Innovation and sustainability drive an increasingly global design culture in Dubai.