Study Highlights Most and Least Expensive CRE Markets

New York ($11.80 per square foot) and Salt Lake City ($4.87 psf) top the Building Owners and Managers Association International’s list of most and least expensive commercial real estate city-markets based on total operating expenses. Washington, D.C., ($44.40 psf) and Columbus, Ohio, ($12.09 psf) ranked as the most and least expensive based on rental income.

Results were released in BOMA’s 2013 Experience Exchange Report®, which aggregates 2012 rental income and operating expense figures from more than 5,300 buildings across 250 markets and 115 cities in the U.S. and Canada.

The total operating expense figures incorporate all expenses related to operating office buildings, including utilities, repairs and maintenance, roads and grounds, cleaning, administration, and security, according to the report. Survey respondents reported a 3.9 percent overall decrease in total operating expenses from 2011 to 2012, likely due to increasing efforts to “maximize building efficiency in the face of dwindling income streams.”

Rental incomes calculations include rental income from office, retail, and other spaces, such as storage.Average rental income dropped 2.9 percent from 2011 to 2012 and property owners and managers continue to compensate for income losses with greater expense reductions, according to the report.

Read the complete report.