The BENCHMARK Guide is a comprehensive report that helps community association boards, developers, property managers, and owners of high-rise properties make informed decisions about their operations and budget strategies.
DANIA BEACH, Fla., Aug. 19, 2024 /PRNewswire-PRWeb/ -- FirstService Residential, North America's leading residential property management company, has released its inaugural BENCHMARK guide on high-rise operating costs and budgets. This comprehensive report helps community association boards, developers, property managers, and owners of high-rise properties make informed decisions about their operations and budget strategies.
BENCHMARK: High-Rise offers insights into insurance, maintenance, sustainability, amenities, reserves, and capital planning. The data was compiled from communities in FirstService Residential's managed portfolio of 3,800 high-rise buildings across major urban areas in the United States and Canada. This encompasses a range of residential communities, including condominiums, cooperatives, and corporations — both long-standing associations and those newly developed.
"Board members are everyday heroes performing a balancing act in the communities they serve. In their budgeting process, that means delivering on service expectations while managing costs. Our goal is to simplify community living by providing information to help association leaders optimize their budgets with confidence and assist them in communication with their residents," said David Diestel, CEO of FirstService Residential. "FirstService Residential's extensive portfolio of high-rise properties has provided us with deep insights into the operating costs and budget challenges communities face, and comparable data to share with developers and the industry."
Key findings from 2024 budgets include:
- In the U.S. and Canada, high-rise communities incurred budget increases between 3% and 20%, driven by soaring insurance premiums, rising utility costs, surging labor expenses, and the need for higher reserve contributions.
- Insurance premiums consume a large portion of budgets, amounting to 24% of budgets in Tampa and 21% in Miami. This trend is also notable in Las Vegas at 17% and Vancouver at 18%, indicating a broader pattern of market tightening and climate-related risk.
- Utility costs are the highest in major cities, with the greatest share of budget in cold-weather climates such as Toronto at 25%, New York City at 19%; Boston at 17%, Vancouver at 18%, but also Las Vegas at 15%.
- Two trends are shaping reserve contributions in high-rises: One is new legislation in the wake of the building collapse in Surfside, Florida in 2021, with reserve contributions as a share of annual budget in New Jersey's Gold Coast at 18% and in Miami-Dade County at 9% – a figure expected to increase in 2025 when the new law goes into effect. The other trend points to board members proactively increasing contributions with a heightened awareness of best practices — even in markets unaffected by new regulations. That was observed in DC Metro, with 32% of budgets allocated to reserves; 33% in Los Angeles, San Diego, and San Francisco; and 26% in Toronto. In these markets, boards are boosting reserves with two factors in mind: the property's life cycle, anticipating higher expenses for buildings from the early 2000s-2010s over the next decade, and a forward-thinking approach to rising material and labor costs.
To further explore the findings of BENCHMARK: High-Rise, and to discuss budgeting strategies for 2025 and beyond, FirstService Residential will host a virtual panel on August 20 at 2 p.m. EST, moderated by CEO David Diestel. This event will feature industry experts sharing key trends influencing high-rise budgets, essential factors for board members to consider, and innovative solutions to enhance community value and resident experience.
To register, visit fsresidential.com/benchmarkpanel
For more information about BENCHMARK: High-Rise or to request a copy of the report, visit fsresidential.com/benchmark
About FirstService Residential
FirstService Residential is simplifying property management. Its hospitality-minded teams serve residential communities across the United States and Canada. The organization partners with boards, owners, and developers to enhance the value of every property and the life of every resident.
Leveraging unique expertise and scale, FirstService serves its clients with proven solutions and a service-first philosophy. Residents can count on 24/7 customer care and tailored lifestyle programming, amenity activation, and technology for their community's specific needs. Market-leading programs with FirstService Financial, FirstService Energy, and special districts teams deliver additional levels of support.
Boards and developers select FirstService Residential to support their vision and drive positive change in the communities in their trusted care. FirstService Residential is a subsidiary of FirstService Corporation (NASDAQ and TSX: FSV), a North American leader in providing essential property services to a wide range of residential and commercial clients.
Media Contact
Britni Ackrivo, Gregory FCA, 856.906.9615, [email protected], www.fsresidential.com
SOURCE FirstService Residential
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