BOMA EER 2010: Managers Controlled Operating Expenses
- Control of utility expenses remains a high priority for most management teams. For U.S. private sector suburban buildings, utilities expenses decreased 9.6% during 2009, from $2.49 per square foot (psf) to $2.25 psf. In U.S. private sector downtown buildings, utilities expenses decreased 4.4%, from $2.48 psf to $2.37 psf.
- Fixed expenses, including real estate taxes, continue to climb. For U.S. private sector downtown buildings, fixed expenses increased from $4.50 psf to $4.65 psf, a 3.3% increase. The jump likely reflects an increase in real estate taxes, which constitute the largest share of the fixed expenses category. Suburban buildings, however, only experienced a 1¢ increase in fixed expenses, from $3.09 psf in 2008 to $3.10 psf in 2009.
- For U.S. private sector downtown buildings, office rental income increased 2.5%, from $25.96 psf in 2008 to $26.62 psf in 2009, though total income dropped 1.3%, from $28.42 psf in 2008 to $28.04 psf in 2009.
- For U.S. private sector buildings, retail rent increased 21.7%, from $17.65 psf in 2008 to $21.48 in 2009. Retail occupancy for all U.S. private sector buildings dropped 1.3%. For downtown properties, it decreased just 0.3%. Suburban properties saw a more significant drop in retail occupancy, a decrease of more than 10%.
- Despite gains in retail rent, miscellaneous income dropped 11%, from $1.55 psf in 2008 to $1.38 psf in 2009. The drop in miscellaneous income may be due to a drop off in retail sales, as miscellaneous income includes retail income as a percentage rent from retail sales as well as gross parking income; tenant service income; and other income from such sources as vending machines, signage, late charges, health club, etc.
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