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IREM: How Do Your Properties Measure Up?

Want to benchmark your property against similar properties locally, regionally or nationally? Looking to understand major real estate trends for commercial and/or residential properties? Need to forecast your property’s performance or potential revenue?

The Annual Income/Expense Analysis Reports from the Institute of Real Estate Management (IREM) allow you to do all of that and more. The reports cover five different property types, (Condominiums; Cooperatives & Planned Unit Developments; Conventional Apartments; Federally Assisted Apartments; Office Buildings; and Shopping Centers) and allow real estate management professionals to benchmark, evaluate, budget and plan their way to a competitive edge.

Top trends and insights from the Income/Expense Analysis reports include:

OFFICE BUILDINGS

• Total operating costs for downtown buildings in 2016 increased 6.3 percent, to $10.84 per square foot of rentable area, while those for suburban properties remained the same at $8.32 per square foot.
• Nationally, net operating costs for suburban buildings continued its three year decline to $5.90 per square foot of rentable area, whereas those for downtown properties also decreased for the third straight year to $7.41 per square foot.
• The national vacancy rate for suburban properties in operation for 12 months was 5 percent in 2016, up 1 point from the prior year. Downtown properties experienced an eight percent vacancy rate, no change from 2015.

SHOPPING CENTERS

• Median income for open shopping centers across the country in 2016 based on average actual occupancy (AAO), increased to $17.26 per square foot from $16.58 the prior year. Open center operating costs decreased to $5.08 per square foot from $5.10 in 2015.
• Broken out regionally, median income for open centers in 2016 ranged from $13.20 to $23.48 per square foot, versus a range of from $13.03 to $26.25 per square foot in 2015. The Northeast and Mid-Atlantic regions reported the highest income per square foot at $23.48.
• In terms of expenses, insurance and taxes in 2016 accounted nationally for 44.7 percent of the typical open center’s total operating costs; contracted services—such as landscaping, security and trash removal—accounted for 14.2 percent; and maintenance/repair and utilities accounted for 7.7 percent and 8.3 percent, respectively.

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