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According to the report, median income for open shopping centers across the country in 2005, based on average actual occupancy (AAO), increased 14 percent to $13.93 per square foot from $12.17 the prior year. Open center operating costs rose to $3.99 per square foot from $3.49 in 2004.
These are among the key findings reported in the 2006 edition of the Income/Expense Analysis: Shopping Centers, a new benchmarking study published by the Institute of Real Estate Management (IREM).
Conducted by IREM since 1991, this annual study analyzes the previous year’s operating data for nearly 400 open shopping centers throughout the United States. It is designed to provide real estate professionals and investors with current financial data for evaluating the performance of their properties and for preparing appraisals, budgets, loan requests and sales proposals.
Broken out regionally, median income for open centers in 2005 ranged from $12.07 to $18.61 per square foot versus a range of $10.98 to $14.90 per square foot in 2004. In both years, the West Coast reported the highest income per square foot.
Regional results also revealed that the Southeast had the lowest median operating costs for open centers last year at $2.53 per square foot, whereas the Midwest had the highest costs at $4.90 per square foot.
Insurance and taxes accounted nationally for 45.1 percent of the typical open center’s total operating costs in 2005 according to IREM. Contracted services – such as landscaping, security and trash removal – accounted for 12.5 percent of operating costs, whereas maintenance/repair and utilities accounted for 9.5 percent and 7.8 percent of operating costs, respectively. The percentage breakdown for major expenses this past year approximate those for 2004.
Finally, the study reported a national occupancy level for open shopping centers in 2005 of 96 percent, a decline of 1 percent from 2004.