Income and expenses are both growing for privately owned office buildings, suggesting that building owners and managers may be cresting a post-recession hill.
Rental income increased by 7.2% and overall income climbed by 7.4% in 2013 compared to 2012, according to BOMA International’s 2014 Experience Exchange Report, an annual benchmarking survey. Total operating expenses grew by 5.3%, while total operating plus fixed expenses grew by 5.6%. The growth of both income and expenses together indicates growth, BOMA analysts say in a recent statement.
The survey also revealed increases in office occupancy rates and weekly operating hours, while square footage per office worker decreased. The findings indicate that more people are occupying the same space for longer periods of time, explaining the simultaneous increase in expenses, BOMA says.
“Densification of space is reshaping the commercial real estate landscape,” says John G. Oliver, chair of BOMA International and managing principal for Oliver & Company. “Increases in both income and expenses in this year’s EER indicate both strong industry growth as well as an adjustment to a denser office environment.”