IBM calculating machines. Notecards. Spray glue. It’s hard to imagine that these were the tools that brought the IREM income and expense benchmarking data to life. Formerly called the Experience Exchange of Rental Income and Operating Expense Data, this information was tabulated by IREM as a special issue of the Journal of Property Management beginning in 1954 for conventional apartments.
The first benchmarking report consisted of submissions by 54 real estate management companies with data on 146 apartment buildings. Shortly after inception of the publication, this apartment building data was segregated into categories such as elevator, walk-up, and garden-style buildings, while also being subdivided into cities and regional areas.
Interesting to note is that the apartment operating costs were originally reduced to an annual “cost per room,” as at that time, a per room analysis was the best available and most prevalent measure of space. Some of the most notable trends over the first five years of data collection included the highest level of growth in gross rental income, maintenance wages, insurance, and taxes—perhaps not unlike trends real estate managers see today.
The advent of office building data collection began over 20 years later with a focus on suburban office building operations. Information on 163 buildings was included with data represented on a dollar-per-square-foot basis. A stated goal in that first office building report was that “this publication be one of continued growth and increasing sample size.”
And the Institute forged ahead to achieve just that—adding three additional publications to meet an industry demand for each. Data on condominiums, cooperatives, and planned unit developments appeared independently from the apartment report in 1977. With the publishing of 1985 data, federally assisted apartments had their own publication, showing expenses that significantly exceeded those of their conventionally financed counterparts. 1985 also marked the first year that computer-based data was made available for viewing on “computer terminals.” Lastly, the Institute debuted its fifth benchmarking publication based on the statistical analysis of open and closed shopping centers in 1991.
A pandemic pause
From that rich history, the Institute produced its latest round of benchmarking publications with operating data on over 10,000 buildings and developments. And then came a global pandemic. Real estate managers faced new challenges, priorities were shifted, and minimal data needed to produce the benchmarking reports was received.
Like many outcomes of the COVID-19 pandemic, this offered not just a challenge, but an opportunity for the Institute to reevaluate its benchmarking products. In April of last year, after consultation with the Executive Committee, the Institute made the decision to pause production of the Income/Expense Analysis Reports and to instead focus on how to relaunch a new and enhanced product.
How could the data submission process be improved for real estate managers? How could the benchmarking outputs be updated? Were there new property types to explore?
The future of benchmarking
Going forward, IREM will produce an entirely digital interactive benchmarking tool: Income/Expense IQ—with a more streamlined submission process and more timely data.
The Institute has partnered with Lobby CRE, a data management and analytics platform specifically designed for commercial real estate firms of any size and type. Lobby CRE was founded with the goal of easily aggregating all data sources and visualizing performance across properties in one user-friendly solution. Data from property management software (PMS) systems will be set up to automatically load into the new database. And, as in previous years, users will still be able to manually upload data into the new portal. As always, data will be anonymized.
Members of both the outgoing and incoming Income/Expense Advisory Boards provided guidance as IREM reimagined this solution. Direction was shared on data entry points and desired data outcomes, and sample property data was provided by members of this Board for development and testing.
In 2021, the new portal will include office buildings and conventional apartments. In addition, given the rise of industrial property management among our membership and the industry, IREM is pleased to launch a new industrial dataset.
Benchmarking data will first be available for the year 2020 as a whole and will ultimately be accessible on a rolling month-by-month basis as more PMS systems integrate directly with the new portal, allowing for real-time analysis and decision-making.
For over six decades, IREM has been committed to collecting and providing operating data benchmarks for a variety of property classes. This intelligence is used to assess a property’s financial health, analyze historical trends, and develop sound operating budgets for future years. The Institute will continue providing this value to our members and the larger real estate community going forward.