Expenses and Income Dip for Office Buildings

06/28/2013 |

Private-sector office buildings saw a 9% drop in utility costs in 2012, a response to decreasing income.

An intense focus on maximizing building efficiency despite decreases in income is behind a 9% drop in utility costs and a 3.9% decrease in total operating expenses for private-sector office buildings, according to the 2013 Experience Exchange Report, an annual report by BOMA International and research firm Kingsley Associates.

Rental income and overall income decreased by 2.9% and 3.23%, respectively, in 2012, the report says. To make up for the lost income, building owners and managers represented in the results reduced expenses by cutting energy use and weekly HVAC-serviced building hours. As a result, the private sector’s electricity expenses decreased roughly 12% in 2012 over 2011, and the average weekly building hours dropped 5% (from 70 hours to 66) over the same period.

Transportation costs in 2012 offered mixed results; in-house parking costs declined by a surprising 23%, and the parking ratio declined 12%, going from 1.61 stalls per 1,000 square feet in 2011 to 2012’s 1.42 stalls. However, shuttle costs shot up a staggering 89%. This data “suggests that building owners are providing more perks to potential tenants, such as shuttle services to public transportation and satellite lots, to remain competitive in the market,” the report notes.

The Experience Exchange Report incorporates voluntarily reported insights from over 5,300 buildings in 250 markets across 115 U.S. and Canadian cities.

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