flexiblefullpage -
billboard - default
interstitial1 - interstitial
Currently Reading

Research identifies most expensive U.S. commercial real estate markets

Research identifies most expensive U.S. commercial real estate markets

New York City, Washington, D.C. and San Mateo, Calif., rank highest in rents.


By By BD+C Staff | December 20, 2011
At $48.27 per square foot, New York City is the most expensive commercial real e
At $48.27 per square foot, New York City is the most expensive commercial real estate market in the U.S.

The Building Owners and Managers Association (BOMA) International has identified the most expensive commercial real estate markets in the U.S. The data is drawn from the 2011 Experience Exchange Report (EER), which provides an annual analysis of the office building operating income and expense data compiled across approximately 940 million square feet of commercial office space in more than 6,500 buildings in 278 different markets. The 2011 report is based on operating income and expenses from 2010.

The most expensive U.S. cities, based on total rental income, include:

  1. New York, N.Y., $48.27 per square foot (psf)
  2. Washington, D.C., $42.63 psf
  3. San Mateo, Calif., $41.61 psf
  4. Santa Monica, Calif., $36.67 psf
  5. San Francisco, Calif., $34.86 psf
  6. Boston, Mass., $31.15 psf
  7. San Jose, Calif., $30.35 psf
  8. Los Angeles, Calif., $27.97 psf
  9. West Palm Beach, Fla., $27.71 psf
  10. Chicago, Ill., $25.20 psf

Total rental income includes rental income from office, retail, and other space, which includes storage areas.  Amid the economic downturn in real estate markets, few markets demonstrated significant increases in rental income, suggesting that rental rates remain relatively stable and favorable for tenants seeking to pursue new leases or renegotiate existing ones. Among the most expensive cities, only New York and San Francisco showed increases in rental income.

Gauging most expensive cities on the basis of total operating and fixed expenses produces a slightly different list:

  1. New York, N.Y., $21.44 psf
  2. Washington, D.C., $16.86 psf
  3. Boston, Mass., $15.16 psf
  4. Morristown, N.J., $14.67 psf
  5. San Francisco, Calif., $14.43 psf
  6. Miami, Fla., $12.87 psf
  7. Santa Monica, Calif., $12.84 psf
  8. Plainfield, N.J., $12.83 psf
  9. Chicago, Ill. and Los Angeles, Calif., 12.49 psf
  10. Newark, N.J., $12.46 psf

Total operating expenses includes all expenses incurred to operate office buildings, including utilities, repairs/maintenance, cleaning, administrative, security and roads and grounds. Fixed expenses include real estate taxes, property taxes and insurance.  In New York, average total operating plus fixed expenses were $21.44 per square foot (psf), while in Los Angeles, they averaged $12.96 psf. Operating expenses increased in most markets in the last year. Fixed expenses were volatile, which could be attributed in part to rising utility costs as well as rising real estate taxes. While many cash-constrained cities and municipalities are looking to real estate for tax revenue, many property owners are contesting tax assessments because asset values have decreased due to the economic downturn. BD+C

Related Stories

Office Buildings | Dec 6, 2022

‘Chicago’s healthiest office tower’ achieves LEED Gold, WELL Platinum, and WiredScore Platinum

Goettsch Partners (GP) recently completed 320 South Canal, billed as “Chicago’s healthiest office tower,” according to the architecture firm. Located across the street from Chicago Union Station and close to major expressways, the 51-story tower totals 1,740,000 sf. It includes a conference center, fitness center, restaurant, to-go market, branch bank, and a cocktail lounge in an adjacent structure, as well as parking for 324 cars/electric vehicles and 114 bicycles.

Multifamily Housing | Dec 6, 2022

Austin's new 80-story multifamily tower will be the tallest building in Texas

Recently announced plans for Wilson Tower, a high-rise multifamily building in downtown Austin, Texas, indicate that it will be the state’s tallest building when completed. The 80-floor structure will rise 1,035 feet in height at 410 East 5th Street, close to the 6th Street Entertainment District, Austin Convention Center, and a new downtown light rail station.

Geothermal Technology | Dec 6, 2022

Google spinoff uses pay-as-you-go business model to spur growth in geothermal systems

Dandelion Energy is turning to a pay-as-you-go plan similar to rooftop solar panel leasing to help property owners afford geothermal heat pump systems.

Contractors | Dec 6, 2022

Slow payments cost the construction industry $208 billion in 2022

The cost of floating payments for wages and invoices represents $208 billion in excess cost to the construction industry, a 53% increase from 2021, according to a survey by Rabbet, a provider of construction finance software.

Mixed-Use | Dec 6, 2022

Houston developer plans to convert Kevin Roche-designed ConocoPhillips HQ to mixed-use destination

Houston-based Midway, a real estate investment, development, and management firm, plans to redevelop the former ConocoPhillips corporate headquarters site into a mixed-use destination called Watermark District at Woodcreek.

Office Buildings | Dec 5, 2022

How to foster collaboration and inspiration for a workplace culture that does not exist (yet)

A building might not be able to “hack” innovation, but it can create the right conditions to foster connection and innovation, write GBBN's Chad Burke and Zachary Zettler.

University Buildings | Dec 5, 2022

Florida Polytechnic University unveils its Applied Research Center, furthering its mission to provide STEM education

In Lakeland, Fla., located between Orlando and Tampa, Florida Polytechnic University unveiled its new Applied Research Center (ARC). Designed by HOK and built by Skanska, the 90,000-sf academic building houses research and teaching laboratories, student design spaces, conference rooms, and faculty offices—furthering the school’s science, technology, engineering, and mathematics (STEM) mission.

Mass Timber | Dec 1, 2022

Cross laminated timber market forecast to more than triple by end of decade

Cross laminated timber (CLT) is gaining acceptance as an eco-friendly building material, a trend that will propel its growth through the end of the 2020s. The CLT market is projected to more than triple from $1.11 billion in 2021 to $3.72 billion by 2030, according to a report from Polaris Market Research.

Giants 400 | Dec 1, 2022

Top 50 Parking Structure Architecture + AE Firms for 2022

Choate Parking Consultants, Gensler, Clark Nexsen, and Solomon Cordwell Buenz top the ranking of the nation's largest parking structure architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report. 

Education Facilities | Nov 30, 2022

10 ways to achieve therapeutic learning environments

Today’s school should be much more than a place to learn—it should be a nurturing setting that celebrates achievements and responds to the challenges of many different users.

boombox1 - default
boombox2 -
native1 -

More In Category

Office Buildings

‘Chicago’s healthiest office tower’ achieves LEED Gold, WELL Platinum, and WiredScore Platinum

Goettsch Partners (GP) recently completed 320 South Canal, billed as “Chicago’s healthiest office tower,” according to the architecture firm. Located across the street from Chicago Union Station and close to major expressways, the 51-story tower totals 1,740,000 sf. It includes a conference center, fitness center, restaurant, to-go market, branch bank, and a cocktail lounge in an adjacent structure, as well as parking for 324 cars/electric vehicles and 114 bicycles.




halfpage1 -

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021

 



Magazine Subscription
Subscribe

Get our Newsletters

Each day, our editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Subscribe

Follow BD+C: