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

General Information
2009 Income/Expense Analysis: Office Buildings, Institute of Real Estate Management, 282 pages, soft cover, charts/graphs, $ 419.95 (plus $15.50 shipping and applicable state sales tax); IREM Members $209.95 (plus shipping and handling).  In addition to the traditional printed format, the new 2009 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.

(CHICAGO, IL, Sept. 9, 2009)  Total collections for suburban office complexes nationwide in 2008 increased a slight 1.3 percent from 2007 levels to $19.56 per square foot of net rentable area.  In contrast, those for downtown properties experienced a double-digit rise of 10 percent to $21.84 per square foot. Total actual collections for downtown properties were 11.7 percent more last year than their suburban counterparts.

These are among the major findings reported in the 2009 edition of the Income/Expense Analysis®: Office Buildings, a new 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 1,850 private-sector office complexes – some containing multiple buildings – in major metropolitan areas and regions in the United States. It is designed to help property owners, managers, investors, appraisers, lenders, developers and other real estate professionals evaluate their buildings’ performance and prepare budget and revenue projections, feasibility studies, etc.

TOTAL OPERATING COSTS RISE MODESTLY
Total operating costs for suburban buildings in 2008 rose 4.4 percent from the prior year to $8.84 per square foot of rentable area, while operating costs for downtown properties increased 9.1 percent to $10.29 per square foot.

Nationally, net operating costs for suburban buildings increased a relatively slight 3.4 percent to $6.40 per square foot of rentable area in 2008 vs. 2007, whereas those for downtown properties increased 8.7 percent to $7.50 per square foot.

KEY EXPENSE COMPARISONS
All major expense categories for suburban properties rose last year except for insurance/services, which declined 3.6 percent and administration/benefits costs, which remained the same. Real estate and other taxes saw the largest increase, 9.0 percent, followed by utility costs, up 4.5 percent, and janitorial/ maintenance services, up 2.8 percent. 

Without exception, all major expense categories for downtown properties increased last year from the year prior. Real estate and other taxes rose 7.7 percent from 2007, janitorial/maintenance costs increased 7.1 percent, utility costs increased 7.0 percent, and insurance/services rose 5.8 percent.

Focusing again on major expense categories, but as a percentage of total operating costs, the IREM® study reveals janitorial/maintenance services along with real estate and other taxes accounted for the largest portion of suburban properties’ operating costs, 24.5 percent each.  Utilities represented 23.9 percent and administrative/benefits and insurance/services represented 12.3 percent and 12.2 percent, respectively.

Similarly, expenditures for janitorial/maintenance services and real estate and other taxes accounted for the largest portion of downtown properties’ operating costs, 26.4 percent and 24.4 percent, respectively.  Utilities represented 22.3 percent and insurance/services and administrative/benefits accounted for 12.3 percent and 12.2 percent, respectively.

Overall, downtown properties proved 14.1 percent more costly to operate in 2008 than their suburban counterparts, with all expense categories less than those experienced by suburban buildings.

VACANCY RATES RISE FOR SUBURBAN BUILDING, REMAIN STABLE FOR THOSE DOWNTOWN
The national vacancy rate for suburban office properties in operation for 12 months rose 2.0 percent in 2008 vs. 2007, whereas the rate for downtown properties remained the same. The 2008 vacancy level for suburban properties was 7 percent; that of downtown properties was 5 percent.   

MEDIAN OPERATING RATIOS
Though downtown properties reported higher total actual collections than suburban properties in 2008, the overall operating experience of both downtown and suburban office markets were similar as reflected by their median operating ratio (total operating costs divided by total actual collections). The median operating ratio at suburban properties was 0.45, while the operating ratio at downtown properties was 0.47.

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. 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.  

PRICE AND ORDERING INFORMATION
The 282-page Income/Expense Analysis®: Office Buildings is available for $419.95 (plus $15.50 shipping and applicable state sales tax). The IREM member price is $209.95 (plus shipping and handling). To order, 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.  Internet users can order the study in soft cover or in a downloadable format by accessing the Publications section of the IREM website at www.irem.org.

FOUR OTHER 2009 I/E ANALYSIS BENCHMARKING STUDIES AVAILABLE
IREM® also has just published new 2009 editions of its four other annual Income/Expense Analysis® studies: Conventional Apartments ($419.95); Shopping Centers ($419.95); Condominiums, Cooperatives & Planned Unit Developments ($374.95); and Federally Assisted Apartments ($374.95). 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.

ABOUT THE INSTITUTE OF REAL ESTATE MANAGEMENT
The Institute of Real Estate Management (IREM^®) is celebrating its 75th anniversary in 2008.  Major sponsors of the year-long celebration areYardi Systems, a leading provider of high-performance software solutions for the real estate industry, and the REALTORS^® Commercial Alliance (RCA), the collective commercial constituency within the National Association of REALTORS^®.

For more than seven decades, IREM has been the source for education, resources, information, and membership for real estate management professionals. An affiliate of the National Association of Realtors^®, IREM is the only professional real estate management association serving both the multi-family and commercial real estate sectors. With 80 U.S. chapters, eight international chapters, and several other partnerships around the globe, IREM is an international organization that also serves as an advocate on issues affecting the real estate management industry.

Membership includes more than 18,000 individual members and 500 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 ACoMcertification, and the Accredited Management Organization® (AMO®) accreditation. These esteemed credentials certify competence and professionalism for those engaged in real estate management. In addition, IREM offers Associate, Student and Academic memberships.

Collectively, IREM CPM® Members in the United States manage over $1.5 trillion in real estate assets, including 8.4 million residential units and 8.4 billion net square feet of commercial space. An additional 977,400 residential units are managed by IREM ARM® Members. IREM Members are employed by some of the most prestigious real estate firms in the world and nearly 70% hold upper-level management positions. Due to their professionalism and vast experience, property owners and investors worldwide continually seek out the management services of IREM Members.

To learn more about the Institute of Real Estate Management and its chapter network, call (800) 837-0706, Ext. 4650 (outside the U.S. call (312) 329-6000) or visit www.irem.org.