Magazine article Journal of Property Management

A Sneak Peek at the Income/expense Analysis® Studies by Irem

Magazine article Journal of Property Management

A Sneak Peek at the Income/expense Analysis® Studies by Irem

Article excerpt

IREM released the 2015 Income/Expense (I/E) Analysis Reports for five property types: Conventional Apartments, Office Buildings, Shopping Centers, Federally Assisted Apartments, Condominiums, Cooperatives and Planned Unit Developments, along with the Metro Reports-for professionals who just need an individual metropolitan market area report-which now includes region and national data.

For over 60 years, these reports have provided the tools to plan, budget and forecast-and to enable real estate management professionals to stay one step ahead of the competition by making data-driven decisions. These benchmarking resources empower professionals to make big data work for them by delivering data from thousands of properties right at the tips of their fingertips, right when they need it.

HIGHLIGHTS FROM THE INCOME/ EXPENSE ANALYSIS STUDIES BY IREM

OFFICE BUILDINGS

The Income/Expense Analysis: Office Buildings research study, conducted by IREM since 1976, analyzes operating income and costs for over 2,200 private-sector office complexes-some containing multiple buildings-in major metropolitan areas and regions in the United States and Canada. Additionally, it contains financial data that is broken out separately for 456 medical office buildings.

HIGHLIGHTS

* Total collections for suburban office complexes nationwide in 2014 increased 4.2 percent from 2013 levels to $19.50 per square foot of net rentable area. Downtown properties experienced a 6.8 percent year-to-year collections increase to $22.93 per square foot. Total actual collections for downtown properties were 17.6 percent greater last year than their suburban counterparts, versus 14.7 percent higher the prior year.

* Total operating costs for suburban buildings in 2014 increased 2.0 percent from the prior year to $8.56 per square foot of rentable area, while those for downtown properties rose 8.1 percent to $11.14 per square foot.

* Nationally, net operating costs for suburban buildings last year rose 5.2 percent to $6.31 per square foot of rentable area, whereas those for downtown properties increased 6.8 percent to $7.84 per square foot.

* The national vacancy rate for suburban properties in operation for 12 months was 6 percent in 2014, down 4 points from the prior year. Downtown properties experienced a seven percent vacancy rate, equal to the prior year.

"Income/Expense reports provide a baseline that we can't operate without. We're able to compare property data in our immediate market and in our region, and the reports are essential to understanding how properties operate."

-NICHOLAS DUNLAP, CPM

CONVENTIONAL APARTMENTS

The Income/Expense Analysis: Conventional Apartments is designed to help real estate professionals evaluate multifamily development and investment options and compare their buildings' performance to industry norms.

The income and expense data for each sample is presented in dollars per square foot of rentable area and as a percentage of gross possible income and dollars per unit. Individual metro market reports for more than 120 cities also are included along with an analysis of vacancy rates and operating unit trends, plus a variety of historical trend reports.

These key findings are drawn from a control sample of conventional apartments that have submitted data for the report consistently over the past four years. The report also contains data drawn from a larger sample of submissions gathered over the past five years, regardless of whether that data was submitted consecutively over the five-year period. In terms of sample size, the report analyzes the previous year's operating income and cost figures for 3,441 multi-family rental properties, representing over 679,000 units across the United States.

HIGHLIGHTS

NOI

> Garden buildings rose 6.3 percent to $5.91 per square foot

> Elevator buildings rose 5.9 percent to $11.07 per square foot

> Low-rise buildings with 25 or more units rose a mere 0. …

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