Cutting down on operating expenditures while maintaining or increasing net income has been a strategy and priority for property managers in 2009, according to the Building Owners and Managers’ (BOMA) 2010 Experience Exchange Report (EER).
“The recession has slowed the volume of sale transactions, placing tremendous importance on maximizing both asset value and net operating income through effective day-to-day management of buildings,” says BOMA International Chair Ray H. Mackey, Jr.
The EER surveyed building managers from 4,200 buildings in over 250 markets and revealed that operating expenses in private sector buildings declined by a little over 1 percent in 2009. While both office and retail rental as well as fixed expenses such as real estate taxes continued to climb, many businesses were able to cut down on utility expenses. In suburban buildings, for example, utilities expenses decreased 9.6 percent during 2009. At 19%, utilities expenses were the second largest portion of total expenditure after fixed expenses (35%).
With a bit of ingenuity, building managers will likely continue to offset unavoidable expenditure hikes with energy-saving, efficiency based renovations and practices. For more information on the report, visit www.boma.org.