Setting Your Standards
Benchmarking with IREM’s Income/Expense Analysis reports
For more than 60 years, IREM has been producing its Income/Expense Analysis reports to give owners, investors and managers the kind of clean, reliable data they need to accurately evaluate the performance of their properties. Managers know that if they are only looking at the results of their own properties’ operations, they’re not getting the full picture. The Income/Expense Analysis reports provide important context and enable the assessment of a subject property in contrast to the competition. The information can be used to compare a property’s performance with similar properties of the same building type and within a similar geographic scope with the objective of spotting differences between the subject property and others in the market.
The reports offer broad indicators for effective benchmarking in order to identify opportunities for improvement. The industry composites contained within the reports can be used to:
- Build more realistic operating budgets
- Identify opportunities for trimming waste and addressing
- inefficiencies with the objective of finding savings in operating expenses
- Calculate operating ratios that enable trends to be quickly spotted and quantified
- Uncover emerging shifts in the market
- Communicate more effectively with owners and clients
- Prepare feasibility studies, appraisals and financing requests
- Gain an understanding of property operating activity when new markets that are being entered
The 2019 Income/Expense Analysis reports contain operating results for the year 2018 from:
- 4,224 conventional apartment buildings containing
- 894,868 units
- 769 federally assisted buildings comprising 62,143 units
- 2,516 condominium and cooperative projects and planned unit developments, representing 328,941 residential units
- 308 shopping centers
- 1,309 downtown and suburban office developments representing 1,760 buildings
A few highlights from the 2019 reports:
| Median per square foot at average actual occupancy (AAO) | Total Collections | Total Expenses | ||||
|---|---|---|---|---|---|---|
| 2017 | 2018 | 2017-2018 % Change | 2017 | 2018 | 2017-2018 % Change | |
| Open Centers | $16.01 | $15.67 | -2.1% | $4.94 | $5.07 | 2.6% |
| Operating Ratio | Vacancy | |||||
| 2017 | 2018 | 2017 | 2018 | |||
| Open Centers | 31% | 31% | 6.0% | 7.0% | ||
| Median per net rentable square foot | Total Collections | Total Expenses | ||||
|---|---|---|---|---|---|---|
| Building Type | 2017 | 2018 | 2017-2018 % Change | 2017 | 2018 | 2017-2018 % Change |
| Elevator | $20.93 | $22.14 | 5.8% | $8.97 | $9.29 | 3.6% |
| Low-Rise 12-28 | $13.32 | $11.90 | -10.7% | $5.84 | $6.48 | 11.0% |
| Low-Rise 25+ | $14.54 | $15.36 | 5.6% | $6.06 | $6.25 | 3.1% |
| Garden | $13.18 | $13.63 | 3.4% | $5.34 | $5.40 | 1.1% |
| Annual Operating Ratio | Vacancy | |||||
| Building Type | 2017 | 2018 | 2017 | 2018 | ||
| Elevator | 43% | 42% | 7.1% | 6.0% | ||
| Low-Rise 12-28 | 44% | 54% | 4.2% | 3.2% | ||
| Low-Rise 25+ | 42% | 41% | 6.9% | 5.6% | ||
| Garden | 41% | 40% | 6.8% | 6.1% | ||
| Median per net rentable square foot | Total Collections | Total Expenses | ||||
|---|---|---|---|---|---|---|
| Section 8 Family | 2017 | 2018 | 2017-2018 % Change | 2017 | 2018 | 2017-2018 % Change |
| High-Rise | $18.60 | $20.53 | 10.4% | $12.12 | $12.26 | 1.2% |
| Low-Rise | $11.35 | $12.25 | 7.9% | $7.19 | $6.98 | -2.9% |
| Garden | $12.12 | $12.95 | 6.8% | $7.89 | $8.22 | 4.2% |
| Annual Operating Ratio | Vacancy | |||||
| Section 8 Family | 2017 | 2018 | 2017 | 2018 | ||
| High-Rise | 65% | 60% | 1.3% | 1.6% | ||
| Low-Rise | 63% | 57% | 2.3% | 2.9% | ||
| Garden | 65% | 63% | 2.7% | 2.2% | ||
| Median per unit per year |
Total Operating Expenses: Condominums |
Total Operating Expenses: Planned Unit Developments |
||||
| Building Type | 2017 | 2018 | 2017-2018 % Change | 2017 | 2018 | 2017-2018 % Change |
| High-Rise | $5,257.29 | $5,139.58 | -2.2% | N/A | N/A | N/A |
| Low-Rise | $2,843.80 | $2,812.33 | -1.1% | $413.75 | $414.26 | 0.1% |
| Townhouse | $2,096.55 | $2,355.15 | 12.3% | $579.72 | $619.07 | 6.8% |
| Combination | $2,227.81 | $2,269.17 | 1.9% | $656.39 | $714.51 | 8.9% |
| Condominums | Planned Unit Developments | |||||
| Replacement Reserves | 2017 | 2018 | 2017 | 2018 | ||
| High-Rise | 22.7% | 24.2% | N/A | N/A | ||
| Low-Rise | 27.3% | 27.3% | 22.1% | 21.1% | ||
| Townhouse | 26.6% | 22.6% | 22.3% | 21.9% | ||
| Combination | 21.5% | 20.5% | 16.2% | 18.7% | ||
| Median per square foot | Total Collections | Total Expenses | ||||
|---|---|---|---|---|---|---|
| 2017 | 2018 | 2017-2018 % Change | 2017 | 2018 | 2017-2018 % Change | |
| Downtown | $22.19 | $23.94 | 7.9% | $10.96 | $10.80 | -1.5% |
| Suburban | $19.66 | $21.63 | 10.0% | $8.30 | $8.59 | 3.5% |
| Operating Ratio | Vacancy | |||||
| 2017 | 2018 | 2017 | 2018 | |||
| Downtown | 47% | 46% | 6.0% | 6.0% | ||
| Suburban | 44% | 42% | 5.0% | 4.0% | ||
The 2019 Income/Expense Analysis reports contain detailed information that can be parsed by metropolitan area, building age and type, geographic location and more. It is available in a variety of formats, including hard-copy books, interactive PDFs that enable data downloads into Excel files and customizable cloud-based online labs that provide over 20 years of data to make benchmarking quick and easy
Issue: September/October 2019
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