For the third year in a row, thanks to a healthy economy and high employment rate, the office building market is recovering nicely. Office supply and demand have nearly balanced with downtown space now leading the suburban market by a stretch in total actual collections. These are among findings of the new 2000 edition of the “Income/Expense Analysis: Office Buildings,” published by the Institute of Real Estate Management (IREM).
In the downtown office market, total collections increased to $16.46/sq.ft. of net rentable office space, as compared to $16.08/sq.ft. for suburban properties. While both suburban and downtown office buildings experienced slight jumps in operating expenses, it was the suburban market that incurred the greatest increase. Suburban expenses rose 5.2 percent to $6.89/sq.ft. while downtown buildings increased 2.5 percent to $7.45/sq.ft. of net rentable area.
National occupancy levels continued to be stable, reaching a healthy 97 percent for suburban projects and 95 percent for central business district (CBD) properties. Two out of six regions in the suburban market, however, experienced slight decreases from 1998 levels.
The annual research study analyzes the operating income and cost figures for more than 3,400 private-sector downtown and suburban office buildings in the US and Canada. For further details and information on the purchase of the study, contact IREM at 312/329-6000 or www.irem.org.
