New York City emerged as the nation's most expensive commercial real estate (CRE) market, according to the 2011 Experience Exchange report issued by the Building Owners and Managers Association (BOMA) International. This year's report analyzed 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.
In terms of expenses based on total rental income – defined as rental income from office, retail and other space – New York City was the most expensive CRE market at $48.27 per square foot (psf). Washington, D.C., came in second at $42.63 psf, followed by three California cities: San Mateo at $41.61 psf, Santa Monica at $36.67 psf and San Francisco at $34.86 psf.
Rounding out the top 10 were Boston ($31.15 psf), San Jose, Calif. ($30.35 psf), Los Angeles ($27.97 psf), West Palm Beach, Fla. ($27.71 psf) and Chicago ($25.20 psf).
Gauging the most expensive cities on the basis of total operating and fixed expenses, BOMA International's list offered a somewhat different line-up. New York City still topped the list, this time at $21.44 psf, followed by Washington, D.C., at $16.86 psf and Boston at $15.16 psf. Morristown, N.J., emerged in fourth place at $14.67 psf, followed by San Francisco at $14.43 psf. Rounding out the top 10 were Miami ($12.87 psf), Santa Monica, Calif. ($12.84 psf), Plainfield, N.J. ($12.83 psf), Chicago and Los Angeles (tied at $12.49 psf) and Newark, N.J. ($12.46 psf).
On the flip side, Shreveport, La., topped BOMA International's list for the least expensive CRE markets based on total rental income at $10.47 psf. Fresno, Calif., topped the list for least expensive CRE markets based on total operating and fixed expenses.
