How to Use Income/Expense Analysis Data in Ways You Never Thought Possible?

Income/Expense Analysis ® Reports

•Reports• Residential• Office• Retail

•Benchmarking•Trends & Historical Data•Case Studies by Ingo Kraus and Nick Schwendeman

•I/E Labs

Income/Expense Analysis Program

Data is King•Evaluate properties and investment options

•Monitor property performance•Stay on top of market trends•Prepare budgets and loan applications•Negotiate beneficial leases

Users

Who uses the data?• Property Managers• Appraisers• Assessors• Financial Institutions• Lenders• Real Estate Consultants & Advisors• Academia • Developers

Five Annual Studies to Aid in Assessing your Property

Income/Expense Analysis® Publications More than 58 years of publishing data• Conventional Apartments• Federally Assisted Apartments• Condominiums, Cooperatives, and Planned Unit Developments

• Office Buildings• Shopping Centers

Conventional Apartments

•3,400 multi-family properties•Presented in:

• Dollars per square foot• Percentage of gross possible income• Dollars per unit

•Breakdowns by age, size and range•Historical trends•Section 42 properties

Conventional Apartments Trends: NOI

Net Operating Income 2012—Unfurnished Buildings Reporting 4 Consecutive Years

In Median Dollars per Square Foot of Rentable Area Building 2009 2010 2011 2012 ’11-‘12 Type % Change Elevator $8.07 $8.49 $8.83 $9.92 12.3% Low-Rise 12-24 4.43 4.41 5.33 5.07 -4.9% Low-Rise 25+ Garden

4.19 4.76

4.55 4.77

4.82 4.95

4.89 5.16

1.5% 4.2%

Conventional Apartments Trends: Rents

Conventional Apartments Trends: Expenses

Federally Assisted Apartments

•1,000 apartment buildings•Data on federally assisted programs

• HUD sections 202, 221(d) 3, 236• Section 8• Rural Development section 515

•Tenant turnover and operating ratios

FAA Trends: Net Operating Income

FAA Trends: Operating Ratios and Turnover

FAA Trends: Total Expenses

Condos, Coops, & PUDS

• 2,100 community associations nationwide

• Grouped by association type and building type

• Tracks:UtilitiesMaintenanceInsuranceTaxesAmenities

CCP Trends: Total Operating Expenses

CCP Trends: Replacement Reserves & Assessments

Office Buildings

• 2,400 private sector office buildings• Downtown and suburban markets • Presented in dollars per square foot• Breakdowns by building size, height, age and rental range• Capital Expenditures• Green Buildings• Medical Office Buildings

Office Buildings Trends: Subtotals

Office Buildings Trends: Net Operating Costs

Median Net Operating Costs 2010-2012—Suburban

By Region In Dollars per Square Foot of Net Rentable Office Area

Regions 2010 2011 2012 ’11-‘12

% Change 1,2,3 $6.70 $6.78 $6.59 -2.8% 4 5.50 5.32 5.35 0.6% 5 5.57 5.53 5.57 0.7% 6 6.78 6.61 6.47 -2.1% 7,8,10 5.47 5.40 5.23 -3.1% 9 5.54 6.07 6.27 3.3% U.S. 5.97 6.03 5.97 -1.0%

Shopping Centers

•Nearly 500 Open Shopping Centers•Income based on types of leases and anchors

•Data by age of center, size, regional areas and national statistics

•Tracks non-enclosed common areas•Special reports

• Leasing fees• Expansion• Tenant turnover• Type of ownership• Gross sales analysis

Shopping Centers Trends: Income

Shopping Centers Trends: Expenses

Benchmarking

•To gauge or measure•A standard point of reference in measuring or judging quality, value, cost, etc.

Benchmarking

•As it relates to buildings, we can benchmark:

• Building performance• Income, Expenses, NOI, etc.

• Tenant turnover• Energy usage• Historical trends• Comparative data

Benchmarking: How?

1. Record building data and operating expense

2. Calculate “per square foot” costs3. Select comparative data4. Calculate dollar and percentage

variances5. Compare data and determine

reasons/justifications for variances6. Set goals, prioritize and implement

expense reduction efforts7. Monitor and document results

Case Study•Ingo Kraus, CPM®

Regional Manager, Altman Management Company, AMO ®

Case Study

•Nick Schwendeman, CPM®

Senior Vice-President, Asset ManagementThe Webb Companies

I/E Labs

I/E Labs--Reports

I/E Labs--Criteria

I/E Labs--Results

Summary

•Five Income/Expenses Analysis® are available from IREM

•Highlighted trend data can be meaningful and provide comparison

•Benchmark and Compare your data•I/E Labs…for trending historical data •Visit our website: IREM.ORG

IREM.org

Matthew O’Hara Income/Expense

Analysis® Managermohara@irem.org(312) 329-6025

Questions? Comments?

We are happy to help you!