WASHINGTON, DC–The federal government has released or will release shortly 33 prospectuses in FY 2016, for a total of 8.1 million square feet.

For the most part, the government can write its own ticket for this space, Joe Brennan, managing director of JLL's national Government Investor Services, tells GlobeSt.com. “It is a great time for the feds to go other there and strike long term, financial deals. The marketplace is willing to pay for long-term deals right now,” he says.

In cases where the fed is cutting such deals, there have been reductions of 15% to 20% in the face rates and concession packages north of $100 per square feet, Brennan said.

However, for various reasons, many federal agencies, divisions and groups are still not ready to make the commitment for long-term space and continue to opt for short-term space, Brennan said.

The inability to strike these deals is costing the federal government, Brennan said. For short-term renewals, the rental rates tend to be 20% higher.

In some cases discussions on such requirements as column spacing and ceiling heights haven't been entirely settled. Column-free space and higher ceiling heights, which the government wants for quality of life purposes, are not easy to find among DC's older building stock — which is what the rates the feds are willing to pay can buy. “That wipes a lot of good B plus buildings off the market,” Brennan says.

In other cases, GSA is considering multi-jurisdictional prospectuses to broaden their prospects — that is, prospectus will consider buildings in Northern Virginia and southern Maryland as well as the District — but these expansive leases come with their own challenges. “Then you have to start weighing such factors as surface parking versus paid parking and different rent caps based on the market,” Brennan said.

About Those Lease Prospectuses

The agencies receiving a prospectus for FY 2016 include: Department of Homeland Security (7), Department of Justice (3), Department of Defense (3), Environmental Protection Agency (3), Social Security Administration (2), Internal Revenue Service (2), Department of Veterans Affairs (1), Federal Election Committee (1), National Archives and Record Administration (1), Pension Benefit Guarantee Corporation (1), Small Business Association (1), US Agency for International Development (1), Department of Education (1), Federal Communications Commission (1), Department of State (1), United States Department of Agriculture (1), International Trade Commission (1), Peace Corps (1), Equal Employment Opportunity Commission (1), and Department of Health and Human Services (1).

Of these 33 leases 17, or 51.5%, experienced a reduction, according to JLL, scaling back GSA's footprint by 1.3 million square feet.

The largest reduction was the Social Security Administration's proposed 362,203-square foot reduction in Woodlawn, MD. The average reduction of the 17 leases was 85,159 square feet.

WASHINGTON, DC–The federal government has released or will release shortly 33 prospectuses in FY 2016, for a total of 8.1 million square feet.

In cases where the fed is cutting such deals, there have been reductions of 15% to 20% in the face rates and concession packages north of $100 per square feet, Brennan said.

However, for various reasons, many federal agencies, divisions and groups are still not ready to make the commitment for long-term space and continue to opt for short-term space, Brennan said.

The inability to strike these deals is costing the federal government, Brennan said. For short-term renewals, the rental rates tend to be 20% higher.

About Those Lease Prospectuses

Of these 33 leases 17, or 51.5%, experienced a reduction, according to JLL, scaling back GSA's footprint by 1.3 million square feet.

The largest reduction was the Social Security Administration's proposed 362,203-square foot reduction in Woodlawn, MD. The average reduction of the 17 leases was 85,159 square feet.

Instant Insights /

The Feds Are Still Paying 20% More in Renewal Rates Than They Should

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