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
| Sep 26, 2013
6 ways to maximize home-field advantage in sports venue design
Home-field advantage can play a significant role in game outcomes. Here are ways AEC firms can help create the conditions that draw big crowds, energize the home team to perform better, and disrupt visiting players.
| Sep 26, 2013
Literature review affirms benefits of daylighting, architectural glazing
The use of glass as a building material positively impacts learning, healing, productivity and well-being, according to a white paper published by Guardian Industries and the University of Michigan Taubman College of Architecture and Urban Planning. The findings highlight the significant influence daylighting and outside views have on employees, workers, students, consumers and patients.
| Sep 26, 2013
Mobilizing your job site to achieve a paperless project: fact or fiction?
True mobility in the field has rapidly evolved from lock-box kiosks on each floor to laptops on rolling carts to tablets and iPads loaded with drawings sets stored in the cloud. And WiFi-ready job sites have gone from “nice to have” to “must have” status in just a little over a year.
| Sep 26, 2013
Leading in the face of change
As AEC firms navigate toward an uncertain future, the most effective leaders are those who eagerly adapt to change. Here are three attitudes that drive leaders who are of most value to their firms.
| Sep 23, 2013
The art of rewarding employees
What’s the best way to reward those employees who go the extra mile, particularly when it’s not always feasible to give large financial bonuses? According to author and “recognition expert” Dr. Bob Nelson, the most effective employee rewards are also the least expensive.
| Sep 23, 2013
Six-acre Essex Crossing development set to transform vacant New York property
A six-acre parcel on the Lower East Side of New York City, vacant since tenements were torn down in 1967, will be the site of the new Essex Crossing mixed-use development. The product of a compromise between Mayor Michael Bloomberg and various interested community groups, the complex will include ~1,000 apartments.
| Sep 20, 2013
August housing starts reveal multifamily still healthy but single-family stagnating
Peter Muoio, Ph.D., senior principal and economist with Auction.com Research, says the Census Bureau's August Housing Starts data released yesterday hints at improvements in the single-family sector with multifamily slowing down.
| Sep 19, 2013
What we can learn from the world’s greenest buildings
Renowned green building author, Jerry Yudelson, offers five valuable lessons for designers, contractors, and building owners, based on a study of 55 high-performance projects from around the world.
| Sep 19, 2013
6 emerging energy-management glazing technologies
Phase-change materials, electrochromic glass, and building-integrated PVs are among the breakthrough glazing technologies that are taking energy performance to a new level.
| Sep 18, 2013
Annual SteelDay to include 125 free events around the U.S.
Hosted by the American Institute of Steel Construction (AISC), its members and partners, SteelDay invites the AEC community and the public to see the contributions the industry has made in the design and construction of steel buildings and bridges.
