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New Income and Expense Data on Office Building Performance Captured in Just-Released IREM Benchmarking Study

Editor’s Note: Review copies and graphs and charts are available to media on request; contact Sharon Peters (312.329.6067) speters@irem.org. For major metropolitan area and regional breakout information, contact Matt O’Hara (312.329.6025), mohara@irem.org.

General Information
2013 Income/Expense Analysis: Office Buildings, Institute of Real Estate Management, 320 pages, soft cover, charts/graphs; IREM Member price is $234.95 and non-member price is $469.95 (plus shipping, handling, and applicable state sales tax).  In addition to the traditional printed format, the new 2013 Edition is available online at www.irem.org.The data is easily downloadable in both Excel and PDF file formats, and is completely customizable in Excel.As a special incentive, purchasers of the report in print format also can receive it in downloadable Excel file and PDF format for an additional $99.99.

(CHICAGO, IL, Aug. 23, 2013)  Total collections for suburban office complexes nationwide in 2012 increased 2.2 percent from 2011 levels to $18.62 per square foot of net rentable area.  Similarly, downtown properties experienced a 1.9 percent year-to-year collections increase to $20.68 per square foot. Total actual collections for downtown properties were 11.1 percent greater last year than their suburban counterparts, versus 11.4 percent higher the prior year.

These are among the major findings reported in the 2013 edition of the Income/Expense Analysis: Office Buildings, the latest benchmarking study published by the Institute of Real Estate Management (IREM).  This annual research study, conducted by IREM since 1976, analyzes operating income and costs for 1,929 private-sector office complexes – some containing multiple buildings – in major metropolitan areas and regions in the United States and Canada. For the third consecutive year it also contains financial data, broken out separately, for 374 medical office buildings. 

The study is designed to help property owners and managers, investors, appraisers, lenders, developers and other real estate professionals evaluate and optimize a buildings performance.  It is an invaluable resource for building better budgets; identifying ways to trim waste, address inefficiencies and make needed improvements; preparing feasibility studies, appraisals and loan requests; and much more.

OPERATING COSTS UP AND DOWN SLIGHTLY
Total operating costs for suburban buildings in 2012 increased a mere 0.2 percent from the prior year to $8.34 per square foot of rentable area, while those for downtown properties rose 1.4 percent to $10.09 per square foot.

Nationally, net operating costs for suburban buildings in 2012 dipped 1.0 percent to $5.97 per square foot of rentable area, whereas those for downtown properties increased a mere 0.7 percent to $7.17 per square foot.

KEY EXPENSE COMPARISONS
Three of five major expense categories for suburban properties decreased slightly last year. Insurance/services costs experienced a 5.7 percent decline, utility costs fell 3.1 percent, and real estate and other taxes decreased 1.4 percent.  On the up side, janitorial maintenance costs rose 3.8 percent from 2011, while administrative/benefits costs equaled those of the year earlier. 

In contrast, all but one of the major expense categories for downtown properties experienced year-to-year increases. Costs for insurance services were up 4.0 percent, those for real estate and other taxes rose 3.1 percent, those for janitorial/maintenance services were up 1.1 percent, and those for administrative/benefits services rose 0.9 percent.  On the down side, utility costs experienced a decline of 6.8 percent from the prior year.

In the aggregate, suburban properties proved 17.3 percent less costly to operate in 2012 than their downtown counterparts, with all expense categories less than those experienced by downtown buildings.

VACANCY RATES DECREASE SLIGHTLY
The national vacancy rate for suburban properties in operation for 12 months was 10 percent in 2012, down 1.0 percent from the prior year. Downtown properties experienced an 8 percent vacancy rate, down from 9 percent in 2011.

STUDY EXAMINES MORE THAN 50 SPECIFIC CATEGORIES
The IREM Income/Expense Analysis research study contains detailed analyses of office building operating revenues and expenses for major metropolitan areas and suburban markets in the United States and Canada. The income and expense data is presented in dollars per square foot for more than 50 specific categories broken out by building size, height, age, and rental range.  

COMPANION PRODUCT TRACKS DATA OVER 10-PLUS YEARS
A new state-of-the-art product called the Income/Expense Analysis Online Lab is available as a companion product for the research study. The Lab is an interactive website with 24/7 access that  enables purchasers to download over 10 years of historical office building data  – including over 100 customizable line-item variables – and compare it to the operating data in their individual portfolios.  

PRICING
The 320-page Income/Expense Analysis: Office Buildings report is available to IREM Members and non-members for $234.95 and $469.95, respectively, plus shipping and applicable state sales tax. Internet users can order the study in soft cover or in a downloadable format by accessing the Publications section (click on Income/Expense Analysis Reports on the drop-down menu) of the IREM web site at www.irem.org. As a special incentive, purchasers of the print report also can receive it in downloadable Excel file and PDF format for just $99.99, with the data completely customizable in Excel.

The companion Online Lab is priced at $324.95 for IREM Members and $649.95 for non-members.  For information on corporate discounts available for multiple users of the product in a given firm, contact Matthew O’Hara at mohara@irem.org, or phone 1-800-837-0706, ext. 6025. 

ORDERING INFORMATION
To order any of the  Income/Expense Analysis: Office Buildings products, contact the IREM Customer Service Department at 430 N. Michigan Ave., Chicago, IL 60611-4090 or call toll-free to (800) 837-0706, ext. 4650. Credit card orders (VISA, MasterCard, Discover or American Express) can be faxed toll-free to (800) 338-4736 or e-mailed to getinfo@irem.org

FOUR OTHER 2013 I/E ANALYSIS STUDIES AND COMPANION LABS AVAILABLE
IREM also has just published new 2013 editions of four other annual Income/Expense Analysis studies, each of which has a companion Lab. The categories covered: Conventional Apartments; Shopping Centers; Condominiums, Cooperatives & Planned Unit Developments; and Federally Assisted Apartments. Pricing and other information is available in the Publications section (click on Income/Expense Analysis Reports on the drop-down menu) of the IREM Web site at www.irem.org

ABOUT THE INSTITUTE OF REAL ESTATE MANAGEMENT
The Institute of Real Estate Management (IREM) is an international community of real estate managers dedicated to ethical business practices, maximizing the value of investment real estate, and promoting superior management through education and information sharing. An affiliate of the National Association of REALTORS, IREM is the home for all industry professionals connected to real estate management – and the only organization serving both the multi-family and commercial sectors.

We believe that good management matters, and that well-managed properties pay dividends in terms of value and in the quality of life for residents, tenants and customers. We believe in professional ethics. We believe in the power of knowledge and the importance of sharing it.

IREM offers a variety of membership types for professionals of every experience level, from on-site managers to high-level executives. Our credentials, earned by meeting high standards of education, experience, and ethical business practices, include: Certified Property Manager (CPM), Accredited Residential Manager (ARM), Accredited Commercial Manager (ACoM), or Accredited Management Organization (AMO).

Since 1933, IREM has set the standard for best practices in real estate management. Today, IREM membership includes nearly 18,000 individuals and 560 corporate members. To learn more about the IREM and its chapter network, call (800) 837-0706, ext. 4650 (outside the U.S. call (312) 329-6000) or visit www.irem.org.