Report names New York City most expensive CRE market

New York is the most expensive commercial market in the United States.

New York City was named the highest priced commercial real estate market in the country during 2011, according to a report from the Building Owners and Managers Association.

Overall, the city had a total rental income of $45.15 per square foot last year, while it averaged $12.46 per square foot for operating expenses. Operating expenses factored in all forms of costs for the upkeep and continued function of office properties in both the interior and exterior of the building, explained BOMA's 2012 Experience Exchange Report. Rental income included not only office properties, but also retail and storage spaces.

Operating expenses vary greatly across the country

San Francisco and Washington, D.C., also had total operating costs per square foot of more than $10, which helped both cities to be second and third in the rankings, the report noted. Boston came in fourth position with more than $9, on average, while Los Angeles was just below $9.

Property management companies with interests in Jackson, Mississippi, experienced the lowest level of operating expenses in the report, with only $4.71 per square foot, BOMA said. Fresno was the next-cheapest, with an average only seven cents higher. Both Salt Lake City and Virginia Beach hovered around $5 per square foot, while Shreveport registered an average of slightly more than $6.

Major metropolitan areas record high rental income figures

Rental income was positive for not only New York City, but also many other major cities. Washington, D.C., had an average per square foot in rental income that was only $1.05 lower than New York, the report explained. Boston was in third, as it recorded an average of $35.51 in income per square foot, while San Francisco had an average of more than $34. San Mateo, California, finished fifth, slightly below $34.

Shreveport had the lowest rental income out of any city in the valuation, with an average of $11.76 per square foot, the report added. Dayton was only three cents higher as the second-cheapest city, while Harrisburg, Pennsylvania, experienced an average lower than $13.50 per square foot. St. Louis and Nashville rounded out the top five, as both experienced figures lower than $16 per square foot during last year.

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