The Building Owners and Managers Association (BOMA) International, in collaboration with research firm Kingsley Associates, recently released its 2017 Office Experience Exchange Report (Office EER) and 2017 Industrial Experience Exchange Report (Industrial EER). The Office EER offers more benchmarking information than any other comparable industry source, and the Industrial EER stands as the only existing benchmarking source in its sector.
According to two-year trend data of identical office properties between calendar years 2015 and 2016, total income in the office sector increased from $28.93 per square foot (psf) to $30.60 psf, while total operating expenses increased from $8.20 psf to $8.26 psf. In addition, real estate taxes went up 7.9 percent year over year from $4.83 psf to $5.21 psf.
While total operating expenses increased by 0.7 percent, not all expenses increased at the same rate—and some remained flat or even decreased. The chart below compares a number of operating expense line items over the two-year period:
U.S. Private-Sector Office Building Occupancy Figures:
- The average occupancy rate decreased by 1.1 percent, from 90.12 percent in 2015 to 89.10 percent in 2016.
- Square footage per office tenant increased by 0.5 percent, from 12,888.27 in 2015 to 12,954.97 in 2016.
U.S. Private-Sector Office Building Income Figures:
- Total rental income increased by 3.8 percent, from $27.33 psf in 2015 to $28.38 psf in 2016.
- Base rent increased 2.4 percent, from $23.67 psf in 2015 to $24.24 psf in 2016.
U.S. Private-Sector Office Building Expense Figures:
- Contract cleaning increased by 0.9 percent, from $1.14 psf in 2015 to $1.15 psf in 2016.
- Total electricity expense went down 10.1 percent, from $1.88 psf in 2015 to $1.69 psf in 2016.
- General administrative office expenses decreased by 61.5 percent, from $0.52 psf in 2015 to $0.20 psf in 2016.
- Insurance remained consistent at $0.36 psf in 2015 and 2016.
Additional top-level industrial sector findings include:
U.S. Private-Sector Industrial Building Occupancy Figures:
- The average occupancy rate increased by 1.4 percent, from 96.76 percent in 2015 to 98.12 percent in 2016.
- Square footage per tenant increased 2.2 percent, from 70,711.40 in 2015 to 72,301.68 in 2016.
U.S. Private-Sector Industrial Building Expense Figures:
- Exterior building maintenance remained constant at $0.14 psf in both 2015 and 2016.
- Energy expense decreased 14.3 percent, from $0.07 psf in 2015 to $0.06 psf in 2016.
- Real estate taxes increased by 5.7 percent, from $0.87 psf in 2015 to $0.92 psf in 2016.
- Insurance remained the same at $0.09 psf in 2015 and in 2016.
For more information and to subscribe to the 2017 Office EER and 2017 Industrial EER, visit eer.boma.org.
About BOMA InternationalThe Building Owners and Managers Association (BOMA) International is a federation of 90 BOMA U.S. associations and 18 international affiliates. Founded in 1907, BOMA represents the owners and managers of all commercial property types including 10.5 billion square feet of U.S. office space that supports 1.7 million jobs and contributes $234.9 billion to the U.S. GDP. Its mission is to advance a vibrant commercial real estate industry through advocacy, influence and knowledge. Learn more at www.boma.org.
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