Looking for cheap office space? Building Owners and Managers Association International has some markets that might interest you.
BOMA has compiled the top five most expensive and least expensive commercial real estate markets, for both operating expense and rental expense. BOMA aggregated 2011 rental income and operating expense figures from more than 5,400 buildings across 250 distinct markets.
No surprises, perhaps, among the most expensive markets based on rental income:
1. New York
2. Washington D.C.
4. San Francisco
5. San Mateo, CA (which is between the San Francisco and San Jose markets)
On the flip side, the five least expensive markets based on rental income:
1. Shreveport, LA
3. Harrisburg, Pa.
4. St. Louis
BOMA notes that most markets most “are seeing meaningful increases in rental income, suggesting that tenants may begin to see rental rates increase as building owners become more confident in their earning potential.” In Shreveport, rental income was up nearly 14 percent from 2010.
Of course, cost is all relative. If your business needs to be in New York or San Francisco, you’re a captive of the going rate for space, and if there’s no reason for you to be in Shreveport or Dayton, bargain commercial space doesn’t really matter. But for companies that are in the market, the numbers suggest that building owners are more confident about their prospects and profit potential, which likely means higher rental rates.
Here’s another set of numbers that could be influencing the cost of commercial real estate – unemployment rates. Bizjournals.com shows, based on U.S. Bureau of Labor Statistics data for July 2012, eight markets with jobless rates under 6 percent.
The two best markets – Omaha and Oklahoma City, had unemployment rates of 4.7 and 4.8 percent respectively. Omaha has a highly diversified economy that remained relatively stable even during the recession, while Oklahoma City is one of the markets benefiting from the boom in the energy sector.
More sobering, 15 markets had jobless rates at 10 percent or higher, seven of them in California.
What’s the job picture like in your market? What sectors of the economy are seeing growth and where is job creation coming from in your community? Share your experiences.