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Operating Expenses Generally Decrease in 2009 for Federally Assisted Multifamily Properties, New IREM Survey Reports

Survey Includes Utility and Maintenance Costs, Net Income and Other Operating Data

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(CHICAGO, IL, Oct. 19, 2010) Operating expenses in 2009 vs. 2008 decreased for most federally subsidized multifamily housing properties, including all Section 202 and Section 221 (d)3 building types. The year-to-year decreases ranged from $.07 to $ .95 per square foot of rentable area.   

This is among the key findings reported in the 2010 edition of the Income/Expense Analysis: Federally Assisted Apartments, a new benchmarking study published by the Institute of Real Estate Management (IREM). Conducted by IREM since 1986, this annual study analyzes the previous year’s operating data for more than 955 high-rise (elevator buildings), low-rise and garden-style properties nationwide – containing 86,350 units – that receive one of six types of federal assistance: HUD Sections 202, 221(d)3, 236, Section 8 Elderly/Handicap and Section 8 Family and Rural Development Section 515. It is designed as a benchmarking and planning tool to help owners and managers of subsidized housing make detailed, accurate comparisons of the performance of properties in their portfolios. It also can be used as a resource for developing appraisals, acquisition or sales proposals, feasibility studies and loan requests.

Utility costs across most types of federally subsidized multifamily buildings decreased in 2009 from the year earlier, with declines ranging anywhere from $0.03 to $0.54 per square foot. In contrast, four building types experienced increases ranging from $0.07 to $0.11 per square foot.  Section221 (d) 3 garden buildings reported the lowest utility costs at $0.84 per square foot.  Section 236 elevator buildings reported the highest such costs at $2.20 per square foot.

Median maintenance costs (costs include security and grounds maintenance, but excluding general maintenance payroll) for all elevator buildings subsidies increased in 2009 vs. 2008 within a range of $.01 to $0.17 per square foot. Similarly, garden-style and low-rise projects reported maintenance cost increases ranging from $.04 to $0.26. Section 221(d) 3 low-rise buildings reported the lowest maintenance costs at $0.27 per square foot; Section 236 elevator buildings reported the highest costs at $1.38 per square foot.

In terms of operating ratios (the total of all expenses divided by total actual collections and expressed as a percentage), all Section 202 buildings increased and all Section 221 (d) 3 buildings decreased. Year-to-year comparisons show that those for Section 202 building categories (elevator, low-rise and garden) ranged from 61 to 68 percent in 2009 vs. 49 to 59 percent in 2008; those for Section 221(d)3 buildings ranged from 52 to 57 percent versus 58 to 63 percent in 2008; those for Section 236 buildings ranged from 63 to 73 percent in 2009 versus 60 to 76 percent in 2008;  those for Section 8 Elderly/Handicapped buildings ranged from 54 to 60  percent in 2009 versus 59 to 61 percent in 2008;  and those for Section 8 Family ranged from 52 to 59 percent  in 2009 vs. 51 to 61 percent in 2008.
In terms of net income, Section 202 building categories in 2009 ranged from $3.65 to $7.41 per square foot; Section 221(d) 3 buildings ranged from $3.87 to $6.07 per square foot; Section 236 buildings ranged from $1.83 to $3.08 per square foot; Section 8 Elderly/Handicapped buildings ranged from $4.64 to $5.54 per square; and Section 8 Family buildings ranged from $3.82 to $7.03 per square foot.

Federally assisted apartments experienced much lower levels of tenant turnover in 2008 than those in the conventional sector.  During the course of the year, subsidized properties reported the number of new tenants moving into their buildings to be 14 percent of total apartments in an elevator building, 25 percent in a low-rise building, and 27 percent for a garden-type property.  Conventionally financed apartments experienced much higher turnover ratios, ranging from 43 percent to 54 percent.

The IREM Income/Expense Analysis research study breaks down operating figures into several categories, such as building type, subsidy type, property size and property age. Regional and city reports are also included.

The 216-page Income/Expense Analysis: Federally Assisted Apartments is available for $389.95 (plus $15.50 shipping and applicable state sales tax).  The IREM Member price is $194.95 (plus shipping and handling). To order, contact IREM’s 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  Internet users can order the study in soft cover or in a downloadable format by accessing the Publications section of the IREM Web site at

IREM also has just published new 2010 editions of its four other annual Income/Expense Analysis studies: Condominiums, Cooperatives & Planned Unit Developments ($389.95); Shopping Centers ($434.95); Office Buildings ($434.95); and Conventional Apartments ($434.95). IREM Members receive a 50 percent discount on each study and member and non-member purchasers of all five studies receive a 15 percent discount on their total order.

A new, state -of-the-art companion product to each of IREM’s five property sector reports will debut shortly.  Called the Income/Expense Analysis Online Lab, an interactive Web site from IREM with unlimited access, the product enables users to download over 10 years of historical data, including over 100 customizable line-item variables, and compare it to the operating data in their portfolio. Specific benefits include being able to (1) make at-a-glance data comparisons by property type, year, line item, and/or location; (2) build and tweak budgets throughout the year; (3) confidently relay precise metrics and trending data to owners and investors.

The price of each Income/Expense Analysis Online Lab ranges from $292.95 to $324.95 for IREM Members and $584.95 to $649.95 for non-members, depending upon the applicable property sector. Purchasers of hard-copy or downloadable Income/Expense Analysis reports and Online Labs will receive a 20 percent discount on their total order.

The Institute of Real Estate Management (IREM) is an international community of real estate managers across all property types dedicated to ethical business practices and maximizing the value of investment real estate. An affiliate of the National Association of Realtors, IREM has been a trusted source for knowledge, advocacy and networking for the real estate management community for more than 80 years.

IREM is the only professional real estate management association serving both the multi-family and commercial real estate sectors and has 80 U.S. chapters, 14 international chapters, and several other partnerships around the globe. Worldwide membership includes nearly 18,000 individual members and over 535 corporate members.

IREM promotes ethical real estate management practices through its credentialed membership programs, including the Certified Property Manager (CPM) designation, the Accredited Residential Manager (ARM) certification, the Accredited Commercial Manager (ACoM) certification, and the Accredited Management Organization (AMO) accreditation. These esteemed credentials certify competence and professionalism for those engaged in real estate management. IREM also offers CPM Candidate, Associate, Student, and Academic memberships. All members are bound by the strictly enforced IREM Code of Professional Ethics.

Collectively, CPM Members in the United States manage nearly $2 trillion in real estate assets, including 11.4 million residential units and 10.4 billion net square feet of commercial space. 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