How current is IREM's operating expense data?

IREM publishes the Income/Expense Analysis series annually. The most recent edition contains data from the prior calendar year. The 2025 edition, published in mid-2025, contains 2024 operating data. For current benchmarking, use the most recent edition. For trend analysis, IREM maintains multi-year comparative data in the reports.

Can I use IREM benchmarks as a defense against tenant audit challenges?

IREM data can support your position in a dispute, but its legal force depends on whether your lease references IREM standards. Courts have accepted IREM data as evidence of industry norms, but it's supporting evidence, not a legal standard. If a tenant challenges that your utilities expense is excessive, showing that your $/SF cost is within IREM benchmarks for your property type and market strengthens your position without guaranteeing a favorable outcome.

IREM Operating Expense Benchmarks: CAM Cost Comparison for Property Managers

By Angel Campa·Founder, CapVeriUpdated March 19, 20264 min read

The Institute of Real Estate Management (IREM) has published operating expense data for commercial properties for decades. Their Income/Expense Analysis series — separate publications for office, retail, and industrial properties — provides one of the most comprehensive benchmarks available for validating CAM expense levels.

For property managers, IREM data serves two practical purposes: validating that your current expenses are reasonable (important for defending reconciliation statements against tenant challenges), and identifying specific categories where your property may be over-spending or under-recovering.

What IREM Operating Expense Data Covers

IREM's Income/Expense Analysis publications collect operating data from properties submitted by IREM members, segmented by:

Property type (office, retail, industrial)
Building class (A, B, C for office)
Geographic region and metropolitan area
Building size ranges

For each segment, IREM reports median, lower quartile, and upper quartile values for:

Total operating expenses per SF
Major expense categories (utilities, maintenance, janitorial, administrative, management fees, taxes, insurance)
Gross income, net operating income, and vacancy rates

This structure allows you to compare not just your total expense level, but each individual expense category against similarly situated properties.

Office Operating Expense Benchmarks

IREM's office data is organized by building class and geographic tier. Key reference points from recent publications:

Class A Urban:

Total operating expenses: typically $12–$18/SF (markets vary significantly)
Utilities: $2.50–$4.50/SF
Janitorial: $1.25–$2.50/SF
Maintenance and repairs: $1.00–$2.50/SF
Management and administrative: $0.75–$1.50/SF
Security: $0.75–$2.00/SF

Class B Suburban:

Total operating expenses: typically $7–$12/SF
Utilities: $1.75–$3.00/SF
Janitorial: $0.75–$1.75/SF
Maintenance and repairs: $0.75–$1.75/SF

Geographic variation within IREM data is substantial. Compare your property specifically against the IREM regional data for your metropolitan area rather than national medians — a Dallas suburban office building should not be benchmarked against San Francisco Class A data.

Retail Operating Expense Benchmarks

IREM's retail data segments by center type, which is particularly important because different retail formats have very different expense profiles.

Neighborhood Centers (grocery-anchored):

Total operating expenses: typically $5–$9/SF (including taxes)
CAM only (excluding taxes and insurance): $2–$4/SF
Maintenance: $0.75–$1.50/SF
Utilities: $0.50–$1.25/SF (common area only)
Management: $0.35–$0.75/SF

Community and Power Centers:

CAM-only expenses tend to be slightly lower than neighborhood centers on a per-SF basis due to larger total area with simpler common areas
Parking lot maintenance is often the largest individual CAM line item

Lifestyle and High-Street Retail:

Significantly higher operating expenses than other retail formats
Landscaping, amenity maintenance, and event programming drive above-average CAM rates

Industrial Operating Expense Benchmarks

Industrial properties have the simplest operating expense profiles of the three major property types. IREM segments industrial data by building type and region.

Distribution and Logistics:

Total operating expenses: $0.50–$1.25/SF
Primary expense: parking lot and site maintenance
Utilities (common area only): minimal
Management fees: often structured as flat fee rather than percentage

Flex and Light Industrial:

Total operating expenses: $0.75–$2.00/SF
Slightly higher than pure distribution due to more common area per SF
Landscaping costs proportionally higher for business park settings

Industrial CAM benchmarks are particularly useful for identifying outliers — a warehouse with $3/SF in CAM is almost certainly misclassified or has a significant data/billing error.

How to Use Benchmarks in Reconciliation Validation

A practical benchmark comparison process:

Step 1: Pull your category-level expense totals. From your CAM reconciliation, extract the expense total for each major category (utilities, maintenance, janitorial, management, security, taxes, insurance).

Step 2: Calculate $/SF for each category. Divide each category total by the total pool square footage to get the per-SF rate.

Step 3: Pull the relevant IREM benchmark. Find the IREM data for your property type, class, and geographic region. Use the median as your primary reference point; upper quartile as the "high but defensible" threshold.

Step 4: Compare and flag outliers. Any category more than 25% above the upper quartile deserves investigation. Any category more than 25% below the lower quartile should be verified against actual expense data (not just assumed to be good news).

Step 5: Document your analysis. Keep the benchmark comparison in your reconciliation file. If a tenant challenges a specific expense category, your benchmark comparison shows that the amount is within normal range.

Limitations of Benchmark Comparisons

Geographic variation is significant. National medians mask wide regional variation. A $3/SF CAM rate for janitorial is below benchmark in Manhattan but above benchmark in suburban Ohio. Always use regional data when available.

Building age matters. Older buildings typically have higher maintenance costs, higher utility expenses (less efficient systems), and more frequent repair needs. IREM doesn't always segment by building age; adjust your comparisons accordingly.

Lease structure affects what's in the pool. A full-service lease includes expenses that an NNN lease excludes. If you're comparing a full-service pool against an NNN benchmark, the comparison is invalid. Verify that the benchmark population uses a comparable lease structure.

IREM data is self-reported. The data quality depends on the reporting practices of IREM member firms. Self-reported benchmarks can reflect reporting inconsistencies as well as genuine expense differences.

Other Benchmark Sources

BOMA Experience Exchange Report: The deepest data source for office properties, with more granular segmentation than IREM for office. Published annually.

NCREIF Property Index: Institutional property data, useful for comparing against Class A properties managed by major institutional owners.

Cushman & Wakefield / CBRE Market Reports: Market-specific operating expense data published quarterly; strong on current market trends but less granular on expense category breakdown.

CoStar Analytics: Property-specific operating data for comparable buildings; useful for direct peer comparison when similar properties have reported data.

Using multiple sources strengthens your benchmarking analysis. When BOMA, IREM, and CoStar data all show similar expense ranges, you have a strong foundation for defending your expense levels against tenant challenges.