Shopping Center Income and Expenses Rise, and Occupancy Levels Dip Slightly in 2005

Aug. 31, 2006
New IREM report reveals findings from shopping-center benchmarking study

Median income for open shopping centers across the country in 2005, based on average actual occupancy (AAO), increased to $13.93 per square foot from $12.17 the prior year. Similarly, open center operating costs rose to $3.99 per square foot from $3.49 in 2004. These are among the key findings reported in the 2006 edition of the Income/Expense Analysis®: Shopping Centers, a new benchmarking study published by the Chicago-based Institute of Real Estate Management (IREM®).

Conducted by IREM since 1991, this annual study analyzes the previous year’s operating data for nearly 400 open shopping centers throughout the United States. It is designed to provide real estate professionals and investors with current financial data for evaluating the performance of their properties and for preparing appraisals, budgets, loan requests, and sales proposals.

The IREM Income/Expense Analysis study breaks down open shopping center operating data into several categories, including property size, age, type of anchor, type of lease, average actual occupancy (AAO), and gross leasable area (GLA). The study includes national, regional, and metropolitan statistics, along with several special reports including leasing fees, expansion, tenant turnover, type of ownership, and gross sales analysis.

Broken out regionally, median income for open centers in 2005 ranged from $12.07 to $18.61 per square foot versus a range of $10.98 to $14.90 per square foot in 2004. In both years, the West Coast reported the highest income per square foot.

Regional results also revealed that the Southeast had the lowest median operating costs for open centers last year at $2.53 per square foot, whereas the Midwest had the highest costs at $4.90 per square foot.

Insurance and taxes accounted nationally for 45.1 percent of the typical open center’s total operating costs in 2005. Contracted services - such as landscaping, security, and trash removal - accounted for 12.5 percent of operating costs, whereas maintenance/repair and utilities accounted for 9.5 percent and 7.8 percent of operating costs, respectively. The percentage breakdown for major expenses this past year approximate those for 2004.

Finally, the study reported a national occupancy level for open shopping centers in 2005 of 96 percent, a decline of 1 percent from 2004.

This information was provided by The Institute of Real Estate Management (IREM), a source for education, resources, information, and membership for real estate management professionals for more than 70 years. To learn more about IREM and its chapter network, call (800) 837-0706, ext. 4650 (outside the United States, call [312] 329-6000) or visit

To order a copy of the 2006 edition of the
Income/Expense Analysis: Shopping Centers, contact IREM’s Customer Service Department at 430 N. Michigan Ave., Chicago, IL 60611-4090 or call toll-free at (800) 837-0706, ext. 4650. Internet users can order the study in soft cover or in the new downloadable format by accessing IREM’s website ( Four other annual Income/Expense Analysis studies are also available.

Voice your opinion!

To join the conversation, and become an exclusive member of Buildings, create an account today!

Sponsored Recommendations

Building Better Schools

Download this digital resource to better understand the challenges and opportunities in designing and operating educational facilities for safety, sustainability, and performance...

Tips to Keep Facility Management on Track

How do you plan to fill the knowledge gap as seasoned facility managers retire or leave for new opportunities? Learn about the latest strategies including FM tech innovations ...

The Beauty & Benefits of Biophilic Design in the Built Environment

Biophilic design is a hot trend in design, but what is it and how can building professionals incorporate these strategies for the benefits of occupants? This eHandbook offers ...

The Benefits of Migrating from Analog to DMR Two-Way Radios

Are you still using analog two-way radios? Download this white paper and discover the simple and cost-effective migration path to digital DMR radios that deliver improved audio...