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  329-6000) or visit (www.irem.org).
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 (www.irem.org). Four other annual Income/Expense Analysis studies are also available.