Compression in Utilities and Total Operating Expenses
- In the last two years, general multi-tenanted buildings have spent about 11% less on roads and grounds expenses, while government buildings have spent about 25% less than private-sector buildings.
- Utilities expenses saw reductions across all property types during 2009. General multi-tenant buildings trimmed $0.08 per square foot (psf) from their utility bills, while corporate facilities doubled that savings ($0.16 psf) and government buildings almost tripled their savings ($0.22 psf).
- Fixed expenses, the large majority of which is real estate taxes, climbed more than 9% at corporate facilities and nearly 4% at medical office buildings, compared to less than 2% at general multi-tenant buildings.
- New York City remained the most expensive in terms of total operating costs, though operating expenses overall declined more than 7% compared to 2008. Atlanta, Dallas, and Minneapolis saw double-digit decreases in total operating expenses in 2009.
- For industry practitioners, benchmarking allows them to fine-tune building operations, build better budgets, underwrite assets and make development projections, rebid service contracts, and educate stakeholders.
- While pressure on operating expenses may ease once the economy recovers, signs indicate that a steadfast focus on energy efficiency has become a key element of ongoing operational practice and will outlast the current market downturn.
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