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Setting Your Standards

Benchmarking with IREM’s Income/Expense Analysis reports

By Journal of Property Management
Standards

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:

2019 Income/Expense Analysis: Shopping Centers
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%

 

2019 Income/Expense Analysis: Conventional Apartments
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%

 

2019 Income/Expense Analysis: Federally Assisted Apartments
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%

 

2019 Expense Analysis: Condominiums, Cooperatives and PUDs
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%

 

2019 Income/Expense Analysis: Office Buildings
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

Journal of Property Management

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