by Brianna Crandall — December 18, 2018 — The Building Owners and Managers Association (BOMA) International, using the data found in its 2018 Office Experience Exchange Report (Office EER), has compiled a list of the most and least expensive private sector office markets in the United States based on total operating expenses.
Total operating expenses incorporate all expenses incurred to operate office buildings, including utilities, repairs and maintenance, roads and grounds, cleaning, administration and security. New York City tops the list at $12.95 per square foot (psf), followed by San Francisco at $11.85 psf and Washington, DC, at $11.43 psf. Boston appears on the list for the first time in five years, and Oakland, California, is also a newcomer to the list — likely driven by the high cost of nearby San Francisco.
At the opposite end of the spectrum, Salt Lake City takes the top spot as the market with the lowest operating expenses. At $6.02 psf, Salt Lake City is less than half the cost of New York, the most expensive city. Nashville, Tennessee, and Orlando, Florida, hold the second and third positions on the list, respectively, with operating expenses only $0.01 psf apart. Overall operating expenses saw a moderate increase, as the industry continues to support a strong labor market.
Five Most Expensive Office Markets — Total Operating Expenses:
- New York City, New York $12.95 per square foot (psf)
- San Francisco, California $11.65 psf
- Washington, D.C. $10.94 psf
- Boston, Massachusetts $10.24 psf
- Oakland, California $9.87 psf
Five Least Expensive Office Markets — Total Operating Expenses:
- Salt Lake City, Utah $6.08 per square foot (psf)
- Nashville, Tennessee $6.14 psf
- Orlando, Florida $6.15 psf
- Phoenix, Arizona $6.25 psf
- Cincinnati, Ohio $6.34 psf
The Office EER and its companion the Industrial EER consist of voluntarily reported data from commercial property owners and managers. The EER is produced by the Building and Owners and Managers Association (BOMA).