IREM: Shopping-Center Income Up, Occupancy Down
- Oct 18, 2010
October 18, 2010
By Allison Landa, News Editor
It’s a mixed bag for those in the battered retail sector. The Institute of Real Estate Management’s benchmarking study, Income/Expense Analysis: Shopping Centers, finds that median income for shopping centers is up from last year, but so are operating costs. Median income in 2009 increased to $16.6 per square foot from $15.9 the previous year. During the same time, operating costs rose to $5.36 per square foot from $4.84 in 2008.
IREM also found that occupancy is down, having dropped from 93 percent in 2008 to 90 percent in 2009. Regional occupancy levels ranged from 86 to 96 percent.
Highest income per square foot was reported in the Pacific Coast region, while the Southeast had the lowest median operating costs at $3.82 per square foot. The Midwest had the highest operating costs at $6.41 per square foot.
Nearly half – 44.2 – percent of total operating costs were accounted for by insurance and taxes, while contracted services such as security and landscaping took up 14.4 percent of costs. Maintenance repair accounted for 8.8 percent of costs, while utilities took up 7.1 percent.
The study breaks down shopping center operating data into several categories, including property size, age, type of anchor, type of lease, average actual occupancy and gross leasable area.