Posted by: BayAreaComRE | June 9, 2010

Government Agencies like the GSA and EPA Drive the Economy and Workplace Strategy

The Government Agencies are one of, if not the largest commercial real estate user in the country. The GSA (General Service Administration), EPA (Environmental Protection Agency), Federal and State Governments lease, own and manage many millions of square feet across the country. In our market, the EPA sits at the top of our Tenants in the Market list (C&W’s comprehensive list of tenants in demand for office space) as the largest user in demand close to 300,000 sf (Back to the the Drawing Board for the EPA). The California State government is offering the largest portfolio of buildings in California (State Receives Offers in Excess of $2 Billion For Office Properties). Then comes the Federal Government’s space, which is run by the GSA. Here are a few stats to put it in perspective.

37.1  Million Square Meters of office space, 8,300 Facilities, 1700 Owned (20.4 Million M2), 6600 Leased (16.7 Million M2), $7.6 Billion Revenue, $500 -800 Million Net Income, 5400 people –94% outsourced. California has a large share of government office space. We have seen RFP’s from the GSA cross our desk, 55,000 sf for 15 years was the most recent one. They are constantly doing deals in markets across the country as well. “[This] is an example of how the government is giving space back in one area while absorbing space in others,” said Rob Hartley, research manager for CoStar Group, a real estate research firm based in Bethesda. “The government is an economic driver” in the commercial real estate market.” – Washington Post.

You may be thinking, the government is big, we get it. So why are we talking about this? The government agencies housed in markets across the country may be a gold mine for information. An article in the New York Times, Don’t LEED us Astray, recently got us thinking, is LEED working? Recent think tanks by Gensler and SPUR got us thinking, how can workspaces evolve (The New Landscape of Commercial Real Estate)? What are the government agencies doing in the environmental realm and how are they becoming more efficient in the workplace?

We posted a presentation from a CoreNet event by Kevin Kelly, Senior Architect of the GSA, which can be viewed below. He discusses the workplace innovations and strategy employed by the government agency. “Nothing could be more sustainable than to respond to the way people really work in this digital age.” The GSA uses a very quick work style assessment which points to: mobility opportunities, highlights mis-allocations of space and points to investment needs. Their findings are introduced in this presentation.

When we asses companys’ office requirements, we encourage companies to re-think their office space, think outside the box, and weigh all the options. Sometimes traditional space is more suitable, and sometimes LEED build-outs don’t make sense. We find ways to reach the bottom line, and we take into account business models, operational strategy, budget and brand. The government has a different bottom line and brand than most businesses, but there are facets of their workplace strategy that may resonate. This is a big user in our market, and if not driving the market, the GSA may be revealing something about it. We will continue to track the GSA and EPA and also post the results of a GSA white paper on LEED, containing actual results from over 40 LEED certified buildings.

Check out more information about the GSA.

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