Office Building Expenses and Income Increased from 2015 to 2016

10/01/2017 |

Despite overall rise, utilities and maintenance costs are down

Office Building

FMs in office and industrial facilities can now measure their performance with newly released data appearing in BOMA International’s 2017 office and industrial benchmarking reports.

BOMA International and research firm Kingsley Associates collaborated on the 2017 Office Experience Exchange Report (Office EER) and the 2017 Industrial Experience Exchange Report (Industrial EER). According to BOMA International, the Office EER provides more benchmarking data than any other comparable sources in the industry, and the Industrial EER is the only benchmarking resource of its kind for industrial buildings.

In identical office properties between calendar years 2015 and 2016, total income increased from $29.93 per square foot (psf) to $30.60, and total operating expenses went up from $8.20 psf to $8.26. Moreover, real estate taxes increased by 7.9% from $4.83 psf to $5.21.

Although overall operating expenses increased by 0.7%, each major expense category changed independently – with several decreasing over time. Expenses for utilities saw a 4.8% decrease, repairs and maintenance went down 1%, and roads and grounds fell by 8%.

In industrial properties, total rental income increased from $5.61 psf to $6.12, and total industrial revenue increased from $5.81 psf to $10.26, a significant jump of 76.6%. Total operating expenses increased by 4.9%, from $1.42 psf in 2015 to $1.49 in 2016. 

The Office EER and the Industrial EER are both comprised completely of voluntarily reported data from property owners and managers. For more information, visit eer.boma.org.


U.S. Private-Sector Office Buildings

Occupancy

  • Average occupancy rate dropped by 1.1%, from 90.12% in 2015 to 89.10% in 2016
  • Square footage per office tenant increased by 0.5%, from 12,888.27 in 2015 to 12,954.97 in 2016

Income

  • Total rental income increased by 3.8%, from $27.33 psf in 2015 to $28.38 psf in 2016
  • Base rent increased by 2.4%, from $23.67 psf in 2015 to $24.24 in 2016

Expense

  • Contract cleaning increased by 0.9%, from $1.14 psf in 2015 to $1.15 psf in 2016
  • Total electricity expenses decreased by 10.1%, from $1.88 psf in 2015 to $1.69 psf in 2016
  • General administrative office expenses dropped by 61.5%, from 52 cents psf in 2015 to 20 cents psf in 2016
  • Insurance was consistent at 36 cents psf in both 2015 and 2016

U.S. Private Sector Industrial Buildings

Occupancy

  • Average occupancy rate increased by 1.4%, from 96.76% in 2015 to 98.12% in 2016
  • Square footage per tenant increased by 2.2%, from 70,711.40 in 2015 to 72,301.68 in 2016

Expense

  • Exterior building maintenance was consistent at 14 cents psf in both 2015 and 2016
  • Energy expense decreased by 14.3%, from 7 cents psf in 2015 to 6 cents psf in 2016
  • Real estate taxes increased by 5.7%, from 87 cents psf in 2015 to 92 cents psf in 2016
  • Insurance was consistent at  9 cents psf in both 2015 and 2016

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