Median income for open shopping centers across the country in 2008, based on average actual occupancy (AAO), increased by about 5 percent, according to a new report from the Institute of Real Estate Management (IREM).
According to the report, Median income increased to $15.87 per square foot from $15.10 the prior year. Similarly, open center operating costs rose to $4.84 per square foot from $4.55 in 2007.
These are among the key findings reported in the 2009 edition of the Income/Expense Analysis: Shopping Centers. The annual study analyzes the previous year’s operating data for 414 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.
Broken out regionally, median income for open centers in 2008 ranged from $14.18 to $22.62 per square foot versus a range of from $11.86 to $20.30 per square foot in 2007. The combined Northeast and Mid-Atlantic regions reported the highest income while the Southeast region reported the lowest.
Regional results also revealed that the Southeast had the lowest median operating cost for open centers last year at $3.41 per square foot, whereas the combined Northeast and Mid-Atlantic regions had the highest at $7.19 per square foot.
Insurance and taxes accounted nationally for 44.2 percent of the typical open center’s total operating costs in 2008. Contracted services – such as landscaping, security and trash removal – accounted for 15.7 percent of operating costs, whereas maintenance/repair and utilities accounted for 9.5 percent and 7.9 percent of operating costs, respectively. The percentage breakdown for major expenses this past year is quite similar to those for 2007.
Finally, the study reported a national occupancy level for open shopping centers in 2008 of 93 percent, as compared to 96 percent the prior year.
