New Data Identifies Most, Least Expensive Office Markets in the U.S.

FOR IMMEDIATE RELEASE

(WASHINGTON, D.C. –  October 18, 2016) The Building Owners and Managers Association (BOMA) International, using the data found in its 2016 Office Experience Exchange Report (Office EER), has compiled a list of the most and least expensive office markets in the United States, both in terms of operating expenses and rental rates. The annual Office EER aggregates office sector income and expense data from the previous year; 2015 data was gathered from more than 5,200 buildings in nearly 275 markets in the U.S. and Canada representing almost 900 million square feet.

Total operating expenses incorporate all expenses incurred to operate office buildings, including utilities, repairs and maintenance, roads and grounds, cleaning, administration and security. Washington, D.C.’s Maryland suburbs are new to the list of most expensive markets for operating costs, while the other four markets have appeared in the top five markets for three years running. The inclusion of both Washington, D.C. and the city’s Maryland suburbs indicates the particular economic strength of the Washington metro area. Also of note, New York returned to the top of the list after being bumped last year by San Francisco. New York’s average total operating expenses of $11.94 per square foot (psf) increased from $11.46 per square foot in 2014. At the opposite end of the spectrum, Huntsville, Alabama, at $4.15 psf, replaced Cincinnati in 2015 as the market with the lowest reporting operating expenses.

Five Most Expensive Office Markets – 1. New York, New York 2. San Francisco, California 3. Washington, D.C. 4. San Jose, California 5. Washington, D.C.’s Maryland Suburbs

Total Operating Expenses: $11.94 per square foot (psf) $10.44 psf $10.39 psf $9.74 psf $9.60 psf

Five Least Expensive Office Markets – 1. Huntsville, Alabama 2. Salt Lake City, Utah 3. Nashville, Tennessee 4. Dallas, Texas 5. Charlotte, North Carolina

Total Operating Expenses: $4.15 per square foot (psf) $5.27 psf $5.44 psf $6.18 psf $6.22 psf

Total rental income includes rental income from office, retail and other space, such as storage areas. The gap between the most expensive and least expensive markets increased slightly in 2015. With an average total rental income per square foot of $44.66, New York was more than three times as expensive as Indianapolis, which came in at $12.90 psf. The Washington, D.C. metro area was also prominent on this list, though at $44.64 psf, the District of Columbia remains significantly more expensive than its Maryland suburbs, which saw average rental incomes of $30.84 psf. Indianapolis took the top spot for least expensive market despite having not appeared on the list until this year.

Five Most Expensive Office Markets – 1. New York, New York 2. Washington, D.C. 3. San Francisco, California 4. Boston, Massachusetts 5. Washington, D.C.’s Maryland suburbs

Total Rental Income: $44.66 per square foot (psf) $44.64 psf $41.47 psf $33.03 psf $30.84 psf

Five Least Expensive Office Markets – 1. Indianapolis, Indiana 2. Huntsville, Alabama 3. Nashville, Tennessee 4. Detroit, Michigan 5. Saint Louis, Missouri

Total Rental Income: $12.90 per square foot (psf) $13.56 psf $15.62 psf $15.63 psf $16.26 psf

The Office EER provides critical insight into the performance of the office sector with more data than any comparable source in the industry. With extensive historical information, the Office EER allows users to conduct multi-year analysis of single markets, as well as generate customized reports based on various building characteristics and property types, such as medical office buildings, corporate facilities and government buildings. Reports are easily downloadable as both Excel and PDF documents, and there is no limit to the number of reports users can generate. Visit eer.boma.org to learn more.

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About BOMA International

The Building Owners and Managers Association (BOMA) International is a federation of 91 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.

Contact

Jessica Bates

Manager of Communications & Marketing

BOMA International

(202) 326-6348

jbates@boma.org