by Brianna Crandall — September 19, 2014—Facilities managers and property managers who oversee shopping centers will find valuable information in the latest benchmarking study analyzing income and expenses and key performance trends for shopping centers just released by the Institute of Real Estate Management (IREM).
Median income for open shopping centers across the country in 2013, based on average actual occupancy (AAO), increased to $17.18 per square foot from $16.18 the prior year. In contrast, open center operating costs decreased, to $5.07 per square foot from $5.20 in 2012.
These are among the key findings reported in the 2014 edition of the Income/Expense Analysis: Shopping Centers study. Conducted since 1991, this annual study analyzes the previous year’s operating data for 361 open shopping centers throughout the United States. It is designed to provide real estate professionals and investors with current financial data for evaluating the performance of their properties and for preparing appraisals, budgets, loan requests and sales proposals.
Other study highlights
- Regional median income: Broken out regionally, median income for open centers in 2013 ranged from $14.28 to $23.43 per square foot versus a range of from $14.10 to $22.74 per square foot in 2012. The Northeast and Mid-Atlantic regions reported the highest income per square foot at $23.43.
- Region median operating cost: Regional results also revealed that the Southeast had the lowest median operating cost for open centers in 2013 at $3.96 per square foot, whereas the Northeast and Mid-Atlantic regions region had the highest at $6.71 per square foot, respectively.
- Expenses: In terms of expenses, insurance and taxes in 2013 accounted nationally for 43.4 percent of the typical open center’s total operating costs; contracted services — such as landscaping, security and trash removal — accounted for 14.4 percent; and maintenance/repair and utilities accounted for 9.3 percent and 8.5 percent, respectively. The percentage breakdowns for major expenses this past year are quite similar to those for 2012.
- National occupancy level: The national occupancy level for open shopping centers in 2013 was 93 percent, up from 92 percent from the prior year. Broken out regionally, occupancy levels this past year ranged between 88 percent and 97 percent.
The IREM Income/Expense Analysis study breaks down open shopping center operating data into several categories, including property size, age, type of anchor, type of lease, average actual occupancy (AAO) and gross leasable area (GLA). The study includes national, regional and metropolitan statistics, along with several special reports including leasing fees, expansion, tenant turnover, type of ownership and gross sales analysis.
A state-of-the-art product called the Income/Expense Analysis Online Lab is available as a companion product to the research study. The Lab is an interactive Web site with 24/7 access that enables purchasers to download over 10 years of historical shopping center data — including over 100 customizable line-item variables — and compare it to the operating data in their individual portfolios.
The 208-page Income/Expense Analysis: Shopping Centers report is available from IREM’s Income/Expense Analysis Reports Web page in either soft cover or a downloadable format to IREM members and non-members for $242.95 and $484.95, respectively, plus shipping and tax. The page also features new 2014 editions of four other annual Income/Expense Analysis studies, each of which has a companion Lab: Conventional Apartments; Office Buildings; Condominiums, Cooperatives and Planned Unit Developments; and Federally Assisted Apartments.
