This year鈥檚 report features insights from data submitted by 4,800 submissions across the U.S. from 2023 end of year reports. Each person who submitted data for the benchmarks received one free benchmark for the asset type of their choice in any metropolitan service area.
Benchmarking and performance trends
By comparing property performance to industry benchmarks, property managers can identify trends, assess competitiveness, create budgets, and evaluate management efficiency. The national summary reveals divergent performance trends across property types.
Multifamily continues its strong growth trajectory with a 5% year-over-year increase in total gross rents, reaching $20,420.92 per unit. This marks a significant 63% increase since 2015.
Office buildings face challenges with a 4% decline in total gross rents in 2023, settling at $20.47 per square foot. However, the long-term trend remains positive with a 15% increase since 2015.
Industrial properties demonstrate resilience with a robust 29% jump in total gross rents in 2023, reaching $8.49 per square foot. This represents a 23% total increase since 2020.
Impact of operating expenses
Rising operating expenses are a critical factor impacting profitability across all property types. The national summary breaks down these expenses by category, allowing for targeted cost optimization strategies. Key findings include:
- Multifamily - Operating expenses rose by 12% in 2023 to $8,419.88 per unit. The overall increase since 2015 stands at a substantial 61%.
- Office - Operating expenses climbed 7% in 2023 to $11.15 per square foot, representing a 27% increase since 2015.
- Industrial - Operating expenses surged by 37% in 2023 to $3.03 per square foot. However, this represents an 18% decrease from 2020.
Inflation in the price of labor, materials, and services necessary to operate and maintain a property necessitated the operating expense increases. In fact, the ratios of total operating expenses to total gross rents for multifamily and office are nearly the same in 2023 as they were in 2015.
Multifamily
2023: $8,420 in total operating expenses 梅 $20,421 in total gross rents = 41%
2015: $5,243 梅 $12,547 = 42%
Office
2023: $11.15 梅 $20.47 = 54%
2015: $8.80 梅 $17.82 = 49%
About the Income/Expense IQ platform
Through the Income/Expense IQ platform, property managers can use the benchmarks to access metro area data, customize dashboards, and use data visualization tools to facilitate informed decision-making. Users can download financial comparison benchmarks into Microsoft Excel, and make comparisons that include total income, total operating expenses, and net operating income.
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