September 10, 2001—After surveying more than one billion square feet of public and private office space, Building Owners and Managers Association (BOMA) International has released the results of its best-known benchmarking tool—the Experience Exchange Report (EER), a compilation of income and expense data for commercial real estate.
The report indicates positive growth in net operating income in the US private sector, with growth exceeding 10 percent for the second consecutive year. It also shows most operating expense components increased from 1999, except for repairs and maintenance and security expenses. The largest increase occurred in roads/grounds by percentage value. The energy industry experienced an increase of $0.05 per square foot per year in overall utility costs—a trend that BOMA says should continue through 2001.
The report suggests that the drop in repair maintenance expenses seems to be a result of new construction coming on-line, hence lowering the aggregate average.
An increase in cleaning expenses is attributed to tight labor markets and the corresponding wage inflation observed in 2000. BOMA’s research found that between 55 percent and 65 percent of all cleaning expenses are labor related.
The city with the highest total income was New York City, which also had the highest total expenses. Boston topped the list with the highest real estate taxes.
The 2001 EER, “Operating a Cost Effective Office Building: Your Guide to Income and Expense Data,” is available for purchase from BOMA International in book or CD-ROM format. Visit BOMA’s Web site for more information.
Based on a report from BOMA International
