What Mad Men Should Know About Office Operating Expenses
As Sterling Cooper Draper Pryce expand their firm, surely they will want their fingers on the pulse of the latest in building operating costs.
While not exactly Manhattan, a trend is a trend, and the results are in for office building operating expenses in Tucson.
The last full year proved to be another where an eye to diligent expense control was a major focus in the Tucson marketplace.
Recovering from significant individual vacancies during the year, C&W | PICOR's clients enjoyed a slight improvement in overall occupancy of 2%. Delinquencies and collection issues lessened over the previous year, as well.
Operating expenses remained stable year over year, with vendors holding pricing firm in a competitive service environment. C&W | PICOR bulk purchase initiatives helped clients receive the most favorable pricing in the market for numerous building services.
Property taxes remain the highest individual expense in commercial office property, highlighting the importance of diligent annual review of assessments and valuation protests where warranted.
Utilities consume the second highest share of the Tucson office expense budget, at 20% of total operating costs. With that in mind, attention to retrofits and energy audits can reduce costs over time.
C&W | PICOR property managers continue to monitor the market and pursue rebates and other cost-saving alternatives for our clients.
Often building systems are converted and updated during the tenant improvement process, in particular with regard to lighting improvements for energy efficiency.
Read our recent articles on 2011 industrial and 2011 retail operating expenses.
Eileen M. Lewis, RPA FMA leads PICOR’s property management division and is one of 13 principals. A long-time Tucsonan and 26 year veteran of the commercial real estate industry, Eileen has managed a portfolio of industrial, retail, and office buildings for private and institutional investors and served as Receiver for distressed assets. An active industry leader locally and nationally, she has served the Building Owners & Managers Association (BOMA), Commercial Real Estate Women (CREW) and others.
Photo credits: EW.com, Gary Rumack Photography