The second round report from the Public Buildings Reform Board recommends 11 properties across nine metro areas as ready for disposition.
It also sharply criticized how the Government Services Administration auctions off properties, “particularly larger complex” ones. The PBRB suggested that the GSA use an auction process developed by Nobel Prize-winning economics professors, which the Federal Communications Commission had used to sell radio spectrum, thereby creating more accurate asset valuations.
The properties that the Board considered “extremely underutilized,” and which would “require billions of dollars to modernize” were found in Riverdale, Maryland; Washington, D.C.; Albuquerque, New Mexico; Miami, Florida; Boston, Massachusetts; Nashville, Tennessee; Houston, Texas; Atlanta, Georgia; and Chicago, Illinois.
Recommended For You
The properties totaled 7.1 million square feet. According to the Board, the dispositions and consolidations of the properties would result in $5.4 billion in savings over 30 years, equivalent to $180 million per year, and generate $346 million in sales proceeds. Its estimates included the costs of relocating employees and disposal of the properties.
“Relocating the federal employees from these properties to other locations will provide them with more cost-effective, energy-efficient, and healthier work environments,” it wrote. Supposedly, proceeds from the sale of properties previously recommended for disposal would fund the divestment process.
They expect “triple bottom line” benefits. First, the buildings “represent massive, deferred maintenance liabilities.” They don’t contribute taxes to local economies and can be used through redevelopment.
However, the Board noted in its criticisms of federal building portfolio management that many of the locations are more than 50 years old, which is “significantly less efficient than modern buildings,” and need “extensive renovations and reconfiguration” to make them ready for additional tenants. Significant investments may require metros to raise substantial funds for redevelopment.
The Board had other strong criticisms of federal building portfolio management. On the data front, they said inadequate collection allows federal agencies to “obfuscate the inefficiencies.” In some cases, a lack of attendance data meant an inability to understand the value of the buildings. There was also a lack of accurate maintenance costs and accruing liabilities.
Heavily influencing many of the GSA’s decisions regarding property retention is the desire to maintain revenue streams from lease payments. Inadequate allocation from Congress means the fund for maintaining the buildings doesn’t receive enough money for the work to be done.
Also, the Board found that the auction system the GSA uses to sell properties is “grossly inadequate” and suggests that the process, developed by two Nobel Prize-winning economists, that the Federal Communications Commission has used to sell electronic communications spectrum would be better suited.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
