July 11, 2005—The US office market reported a five percent increase in net operating income (NOI) and a decrease of 6.1 percent in total expenses in 2004, according to data collected and reported in the Building Owners and Managers Association (BOMA) Internationals 2005 Experience Exchange Report (EER). The data was made available for the first time June 26 at BOMAs North American Commercial Real Estate Congress and The Office Building Show in Anaheim, California.
Thanks to a stronger economy and the creation of new jobs in 2004, building occupancy increased slightly compared to the previous year with 88.7 percent in 2004 vs. 88.54 percent in 2003. Even though total income remained constant at $23.89 in 2004, NOI increased by 5 percent ($14.15 vs. $13.51) in 2003. This was accomplished in part because total operating expenses decreased by 3 percent ($6.32 vs. $6.52) and administrative costs declined 1 percent ($1.22/rsf vs. $1.23/rsf) in 2003, the report found.
Security remains a major concern for commercial building management, with an increase of 2 percent in security expenses ($.56 vs. $.55) from the previous year. Building insurance costs decreased slightly to $.37 per square foot of the building in comparison with $.40 in 2003. However, they remain higher than 2002, when the amount spent on insurance was $.33 per square foot of a building.
For over 80 years, BOMA’s annual EER has been the source for building performance data for the commercial real estate industry. Accessible in CD-ROM, network, and traditional printed formats, this year’s edition features information and statistics on over 5,000 public and private sector buildings throughout the US and Canada.
The EER is available in book or CD-ROM format. To order, call (800) 426-6292 or visit the BOMA Web site.
