BOMA Benchmarking Report Shows Income Increases as Utility Expenses Continue to Decrease
2012 Experience Exchange Report hints at more sustained recovery for commercial real estate.
To view this release online, visit http://www.boma.org/Resources/news/pressroom/Pages/pr062012.aspx
(Washington, D.C – ) The Building Owners and Managers Association (BOMA) International, in collaboration with research firm Kingsley Associates, today released the 2012 Experience Exchange Report (EER). The report showed a 2.5 percent increase in private sector base rent income, which could indicate a more sustained market recovery.
Despite increases in operating and fixed expenses, with standard operating expenses up 1.3 in 2011 percent and operating plus fixed expenses up 4.2 percent in 2011, the private sector saw modest increases in rental and total income of 2.7 percent and 1.7 percent, respectively. This is encouraging news after last year’s income numbers dipped.
The EER findings also indicate that the number of square feet per office worker decreased 2.9 percent last year, from 315 square feet per person in 2010 to 306 square feet per person in 2011. This data is consistent with other industry trends showing office space per worker is decreasing as organizations turn to more mobile work options and open office floor plans.
“As the commercial real estate market makes its way back to normalcy, building owners and managers are beginning to see income levels improving,” commented BOMA International Chair Boyd R. Zoccola, executive vice president, Hokanson Companies Inc. “The market is recovering but still tenuous. The EER numbers also indicate that property professionals continue to operate their buildings as efficiently as possible, making strong asset management more critical than ever.”
The Experience Exchange Report is commercial real estate’s premier income and expense data benchmarking tool. It provides valuable insights into the performance of more than 5,400 buildings, in 250 distinct markets, across 125 cities in The United States and Canada. The EER allows users to conduct multi-year analysis of single markets, and analysis of special use facilities such as medical office buildings, financial buildings, agency managed, corporate facilities, and all-electric buildings.
Private-Sector Office Building Income Trends
· Private Buildings in the U.S. saw a 2.5 percent increase in base rent from $21.61 per square foot (psf) in 2010 to $22.15 psf in 2011.
· The average building’s rent abatements increased 14 percent, from $1.07 psf in 2010 to $1.22 psf in 2011.
Private-Sector Office Building Expense Trends
· Amortized tenant improvement costs in Private Buildings saw a 10 percent increase, from $2.09 psf in 2010 to $2.30 psf in 2011, possibly indicating tenants moving into new space or current tenants improving existing space.
· Repair and maintenance costs saw a 2.7 percent increase, from $1.87 psf in 2010 to $1.92 psf in 2011.
· Utility costs declined for the third consecutive year as BOMA members continued to refine their asset management skills and eliminate unnecessary cost. Utilities decreased 2.5 percent, from $2.38 psf in 2010 to $2.32 psf in 2011.
Now in its 92nd year, the EER continues to be the single most detailed and most reputable source of benchmarking data representing the office building industry across North America. In 2009 the EER transitioned to a new online format through the collaboration with commercial real estate research firm Kingsley Associates. The online format allows users to query data by market, submarket, building size, building type, age of the building, ownership type and more. The data can be exported into charts, PDFs and Excel files, allowing users to expedite analysis, build budgets faster and easily create presentations. The 2012 EER encompasses income and expenses from 2011, reported voluntarily from industry practitioners, and is available now at www.bomaeer.com.
About BOMA International The Building Owners and Managers Association (BOMA) International is an international federation of more than 100 local associations and affiliated organizations. Founded in 1907, its 16,500-plus members own or manage more than nine billion square feet of commercial properties. BOMA International’s mission is to enhance the human, intellectual and physical assets of the commercial real estate industry through advocacy, education, research, standards and information. On the Web at www.boma.org.
Contact FacilitiesNet Editorial Staff » posted on: 8/27/2012