With an average cost per square foot of $16.11, Stamford, Conn., is the most costly U.S. market for commercial real estate, according to a new study by the Building Owners and Managers Association International. New York and San Francisco are also among the nation's priciest markets.
Using the results from the BOMA 2013 Experience Exchange Report, the group compiled a list of the most and least expensive commercial real estate city-markets in the United States. The annual report aggregates rental income and operating expense figures from the previous year; in 2012, data was gathered from more than 5,300 buildings across 250 markets and 115 cities in the United States and Canada.
Five most expensive city-markets – total operating expenses:
1. Stamford, Conn. $16.11 per square foot (psf)
2. New York $11.80 psf
3. Grand Rapids, Mich. $11.16 psf
4. Newark, N.J. $10.34 psf
5. San Francisco $9.66 psf
Five least expensive city-markets – total operating expenses:
1. Stockton, Calif. $3.57 psf
2. Fresno, Calif. $3.61 psf
3. Huntsville, Ala. $4.31 psf
4. Virginia Beach, Va. $4.64 psf
5. Albuquerque, N.M. $4.80 psf
Total operating expenses incorporate all expenses incurred to operate office buildings, including utilities, repairs and maintenance, roads and grounds, cleaning, administration, and security. Fixed expenses include real estate taxes, property taxes and insurance.
There was a 3.9 percent overall decrease in total operating expenses from 2011 to 2012, underscoring an industry focus on maximizing building efficiency in the face of dwindling income streams. For example, New York, which topped the list of most expensive markets for operating expenses last year, saw a decrease of $0.66 per square foot.
Five most expensive city-markets – total rental income:
1. Washington, D.C. $44.30 psf
2. New York $39.00 psf
3. San Mateo, Calif. $34.96 psf
4. San Francisco $34.49 psf
5. Santa Monica, Calif. $34.04 psf
Five least expensive city-markets – total rental income:
1. Macon, Ga. $8.16 psf
2. Shreveport, La. $11.18 psf
3. Columbus, Ohio $12.09 psf
4. Huntsville, Ala. $12.81 psf
5. Little Rock, Ark. $12.81 psf
Total rental income includes rental income from office, retail and other space, such as storage areas.
While average rental income has dropped somewhat, decreasing 2.9 percent from 2011 to 2012, building owners and managers are compensating for these income losses with greater reductions in expenses.
The Experience Exchange Report is the premier income and expense data benchmarking tool for the commercial real estate industry. The EER allows users to conduct multi-year analysis of single markets and select multiple cities to generate state and regional reports. It also offers the capability to search by building size, height, age and more for broader analysis. Subscriptions are available at www.bomaeer.com.
About BOMA International
The Building Owners and Managers Association (BOMA) International is a federation of 93 BOMA U.S. associations, BOMA Canada and its 11 regional associations and 13 BOMA international affiliates. Founded in 1907, BOMA represents the owners and managers of all commercial property types, including nearly 10 billion square feet of U.S. office space that supports 3.7 million jobs and contributes $205 billion to the U.S. GDP. Its mission is to advance the interests of the entire commercial real estate industry through advocacy, education, research, standards and information. Find BOMA online at www.boma.org.
Related Stories
Industry Research | Mar 2, 2023
Watch: Findings from Gensler's latest workplace survey of 2,000 office workers
Gensler's Janet Pogue McLaurin discusses the findings in the firm's 2022 Workplace Survey, based on responses from more than 2,000 workers in 10 industry sectors.
AEC Innovators | Mar 2, 2023
Turner Construction extends its ESG commitment to thwarting forced labor in its supply chain
Turner Construction joins a growing AEC industry movement, inspired by the Design for Freedom initiative, to eliminate forced labor and child labor from the production and distribution of building products.
Multifamily Housing | Mar 1, 2023
Multifamily construction startup Cassette takes a different approach to modular building
Prefabricated modular design and construction have made notable inroads into such sectors as industrial, residential, hospitality and, more recently, office and healthcare. But Dafna Kaplan thinks that what’s held back the modular building industry from even greater market penetration has been suppliers’ insistence that they do everything: design, manufacture, logistics, land prep, assembly, even onsite construction. Kaplan is CEO and Founder of Cassette, a Los Angeles-based modular building startup.
AEC Innovators | Feb 28, 2023
Meet the 'urban miner' who is rethinking how we deconstruct and reuse buildings
New Horizon Urban Mining, a demolition firm in the Netherlands, has hitched its business model to construction materials recycling. It's plan: deconstruct buildings and infrastructure and sell the building products for reuse in new construction. New Horizon and its Founder Michel Baars have been named 2023 AEC Innovators by Building Design+Construction editors.
Seismic Design | Feb 27, 2023
Turkey earthquakes provide lessons for California
Two recent deadly earthquakes in Turkey and Syria offer lessons regarding construction practices and codes for California. Lax building standards were blamed for much of the devastation, including well over 35,000 dead and countless building collapses.
Sports and Recreational Facilities | Feb 27, 2023
New 20,000-seat soccer stadium will anchor neighborhood development in Indianapolis
A new 20,000-seat soccer stadium for United Soccer League’s Indy Eleven will be the centerpiece of a major neighborhood development in Indianapolis. The development will transform the southwest quadrant of downtown Indianapolis by adding more than 600 apartments, 205,000 sf of office space, 197,000 sf for retail space and restaurants, parking garages, a hotel, and public plazas with green space.
Libraries | Feb 26, 2023
A $17 million public library in California replaces one that was damaged in a 2010 earthquake
California’s El Centro community, about two hours east of San Diego, recently opened a new $17 million public library. With design by Ferguson Pape Baldwin Architects and engineering services by Latitude 33 Planning & Engineering, the 19,811-sf building replaces the previous library, which was built in the early 1900s, damaged by a 7.2 earthquake that struck Baja California in 2010, and demolished in 2016.
University Buildings | Feb 23, 2023
Johns Hopkins shares design for new medical campus building named in honor of Henrietta Lacks
In November, Johns Hopkins University and Johns Hopkins Medicine shared the initial design plans for a campus building project named in honor of Henrietta Lacks, the Baltimore County woman whose cells have advanced medicine around the world. Diagnosed with cervical cancer, Lacks, an African-American mother of five, sought treatment at the Johns Hopkins Hospital in the early 1950s. Named HeLa cells, the cell line that began with Lacks has contributed to numerous medical breakthroughs.
Healthcare Facilities | Feb 21, 2023
Cleveland's Glick Center hospital anchors neighborhood revitalization
The newly opened MetroHealth Glick Center in Cleveland, a replacement acute care hospital for MetroHealth, is the centerpiece of a neighborhood revitalization. The eleven-story structure is located within a ‘hospital-in-a-park’ setting that will provide a bucolic space to the community where public green space is lacking. It will connect patients, visitors, and staff to the emotional and physical benefits of nature.
Multifamily Housing | Feb 21, 2023
Multifamily housing investors favoring properties in the Sun Belt
Multifamily housing investors are gravitating toward Sun Belt markets with strong job and population growth, according to new research from Yardi Matrix. Despite a sharp second-half slowdown, last year’s nationwide $187 billion transaction volume was the second-highest annual total ever.
