50 Years of IREM Income/Expense Analysis: How Members Have Helped This Program Evolve
O'Hara, Matthew, Journal of Property Management
"Knowledge is power"
--FRANCIS BACON, ENGLISH PHILOSOPHER
This quote marked the introduction to the 1971 edition of what was then called the IREM Experience Exchange. And while it's now called the Income/Expense Analysis[R] and it scarcely resembles its earlier editions, the fundamental principle that knowledge is the foundation for any good business has always remained the core philosophy behind these annual IREM publications. And just as the roles and responsibilities of the property manager have evolved and grown over the years, so has the income/expense program.
The idea for the first report began in the 1950s, when CERTIFIED PROPERTY MANAGERS (CPM[R]) needed a tool to compare and exchange experienced operating data. Their purpose was to put important financial facts of property operations at the fingertips of the investor, the developer, the appraiser, the lender and, above all, the property manager.
The reports initially were a brief survey of 146 apartment properties, but by 1976, the original apartment building study was supplemented with a survey of suburban office building operations. In 1978, the condominium and cooperative section was broken out of the apartment report and appeared for the first time as an independent publication. By the early 1980s, the office building study was expanded to include downtown properties, and in 1986, the Institute introduced a fourth publication analyzing the operating expense of federally assisted apartment buildings. A fifth publication, Shopping Centers was added to the Income/Expense Analysis series in 1991.
Today, the income/expense series has developed into a major annual research effort encompassing almost 10,000 projects. The property samples have grown expeditiously, and now include nearly 4,400 conventionally financed multifamily properties; 2,400 private sector office buildings; 1,000 federally assisted apartments; 1,500 community associations and 300 shopping centers.
The income/expense data are constantly used in budgeting for buildings under development and those already in full operation; they are frequently applied to the preparation of feasibility studies on contemplated developments. The data also serve as reference tools used in many roles in a property's conception, development and life.
IREM now offers the fully analyzed and compiled operational experiences of buildings and developments in five useful and informative publications: Income/Expense Analysis: Conventional Apartments; Income/Expense Analysis: Office Buildings; Income/Expense Analysis: Federally Assisted Apartments; Expense Analysis: Condominiums, Cooperatives & Planned Unit
Developments; and Income/Expense Analysis: Shopping Centers.
Prior to 1977, all the figures were reported as averages. Since then, the report method has changed to medians and ranges. IREM Members felt this change served better as a bench mark against which property managers, owners, developers and investors could compare their own operating experience and are not intended to set a standard for the industry or to determine the ideal operating ratio. …