Washington, D.C. – For the first time in four years, corporate facilities reported increases in total operating expenses, according to BOMA International’s 2002 Experience Exchange Report.Every year, BOMA International surveys its membership to gather income and expense information, which is published in the Experience Exchange Report. This publication provides readers with a diverse collection of data analyses, ranging from national cross-tabulations and special building data tabulations to city analyses for 123 cities in North America. Since the operation of corporate facilities differs from general multi-tenant office buildings, and their benchmarking needs are also unique, BOMA International asks its corporate facility participants to complete a supplemental survey form to ensure that these distinctions are captured.This year, both downtown and suburban markets showed increases in total operating expenses. When these numbers are compared to overall U.S. private-sector buildings, corporate facilities still outperformed private-sector buildings. At $10.83 per square foot for all U.S. private-sector buildings, the total operating expenses for downtown and suburban corporate facilities were lower by 2.95 percent and 31.27 percent, respectively.U.S. Downtown Expense ComparisonsTotal expenses (operating plus fixed) for the downtown corporate facilities or owner-occupied buildings were up by 5.94 percent to $10.52 per rentable square foot (rsf) for year-end 2001. This is after coming off of three years of consistent decreases in total expenses. This increase can be attributed to an increase in fixed expenses in 2001.Operating expenses actually decreased by 1.84 percent over the previous year. The decrease was driven by lower utilities, repair/maintenance, and cleaning expenditures. Decreases ranged from $0.04 per square foot to $0.12 per square foot over year-end 2000 levels. Roads/grounds, security, and administrative expenses challenged this trend upward by incurring increases of 5.88 percent, 5.81 percent, and 40 percent, respectively. The end result was total operating expenses at $7.46 per square foot per year.U.S. Suburban Expense ComparisonsLike their downtown counterparts, corporate facilities in suburban locations also reported an increase in total expenses. The increase was caused by a rise in both fixed expenses and operating expenses.Operating costs actually increased by 4.44 percent. Although there was an increase overall, cleaning costs decreased $0.08 while roads/grounds decreased by $0.11/rsf. All other line items increased, including hefty increases in security and administrative: 15.49 percent and 10.77 percent, respectively.Total Operating Costs ComparisonsFacility expenses represented 10.69 percent of the total organization budget within our data sample. Table 1 and Table 2 compare differences in total operating expenses for different corporate facility types and different facility industry functions. The corporate facility type with the highest operating expenses by far is computer operations/data services. Also, corporate facilities associated with the manufacturing industry were more expensive to operate than other industry-related facilities, a change from last year’s survey results.Table 1: Facility Type Operating Expenses Total Operating Costs Facility Type ($/RSF)Back-Office Operations and Administrative$5.13Computer Operations/Data Services$12.46Headquarters$6.83Mixed Function (No predominant use)$7.26Research and Development$7.91 Table 2: Industry Function Operating Expenses Total Operating Costs Industry Function($/RSF)Financial/Insurance$6.89Hi-Tech$9.77Utility$5.99Manufacturing$12.10Wholesale/Retail$4.35
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