New York is the most expensive U.S. commercial real estate market, with a total rental income of $48.27 per square foot in 2010, according to a report from the Building Owners and Managers Association, released today. The report looked at approximately 940 million square feet of commercial office space in more than 6,500 buildings in 278 different markets, the association said.
New York and San Francisco were the only two cities of those included in the report to show an increase in rental income in 2010; total rental income includes money earned from office and retail leases. Washington, D.C. was second most expensive market with $42.63 per square feet of rental income, while San Mateo, Calif., a San Francisco suburb, was third at $41.61 per square foot.
New York also had the most expensive operating and fixed expenses, costing $21.44 per square foot. Washington, D.C. was second with $16.86 per square foot and Boston was third at $15.16 per square foot. Operating expenses include utilities, repairs and maintenance. Fixed expenses, which include real estate taxes, property taxes and insurance, were volatile, which could be attributed in part to rising utility costs as well as rising real estate taxes, the report said. Meanwhile, operating expenses increased in most markets last year. — Katherine Clarke