Thanks to the recent societal awareness of energy efficiency it has become a blessing for office buildings in terms of their costs. In the reports released by 2013 BOMA Experience Exchange Report shows supporting results from an analysis of a control sample of U.S. private sector buildings of 2011 and 2012. The EER conducted their 2-year study with a control sample of more than two thousand buildings totaling three-hundred-eighty-five million rentable square feet of office space and includes the buildings which met certain criteria to control the impact of major renovations and changes in occupancy on operating expenses. Therefore, there is high confidence that these trends are within the reality of the market.
In Figure 1 above, we see that an operating expense comparison, in 2011 costs per office rentable square feet was $8.18 but in 2012 costs decreased by 3.9 per cent or $0.32 and around two-thirds of the savings was accomplished by the savings from utilities costs. In figure 2 below, we can see that this is a substantial in savings compared to overall costs of running an office. Utilities are the most cost-consuming compared to all the essentials of maintaining an office such as: business repairs/maintenance, administration, cleaning, security, and roads/grounds. Being the costliest, also makes Utilities the most important to cut down. Compared to operating expenses, we see in figure 2 that utilities made up of 9 per cent of savings, the biggest of all other operating expenses.
Location and type of business also has consideration in operating expenses, in figure 3, we see the total operating expense comparison by different building types. Downtown buildings tend to be much more expensive to manage than suburban areas and also can only cut costs by four per cent than the suburban areas who managed to cut more than six percent.
But seeing operating expense reductions throughout the market in America, we find there has only been an increase in the suburban Chicago area. Figure 4, below, shows that Chicago operating expenses rose by more than five per cent due to higher administrative and security costs and New York remained to be the priciest by operating at about $12.58 per square foot.
The Utility Expense Breakdown is much more fascinating because as shown in figure 5, we notice that savings in utilities was almost universal , referring back to figure 3, downtown buildings were not able to cut operating expenses as much as its suburban counterpart, however in utilities savings, suburban and downtown buildings matched in savings with a decrease in little over nine per cent. Multi-tenanted buildings were also able to generate more savings than corporate or single-tenanted facilities with 9.6 per cent versus 3.8 per cent. The only buildings who were not able to cut down on utilities were medical office buildings and government occupied facilities.
Across the country, utilities were essentially a big part of cutting costs. In figure 6, in 2012 there were savings of almost 20 per cent in utility expenses compared to 2011. Washington, D.C. was able to save 18 per cent, with Houston and Dallas saving near 15 per cent. Where total operating expenses increased for suburban Chicago and already pricy downtown Chicago, both areas were able to cut utilities by 14-16 per cent.
The ability to cut total operating expenses was largely achieved by the ability to cut cost of utilities by simply using energy much more efficiently. Simple things such as watering your landscape during night time or using alternative methods of getting electricity has helped buildings across the country help balance the drop in income in 2012 which created a 2.9 per cent decrease for rental income and 3.2 decrease per cent for overall income. With these effects, developing certification programs, design standards, and innovative energy management systems have created the path for optimized performance and lowering costs of operations.