GSA Picks Finalists for 250,000-SF Office Project

Ron Simpson, senior realty specialist for the General Service Administration, says under federal law he is not allowed to reveal the finalists. Indeed, Simpson says that he can't even reveal the number of teams that showed an interest in the project. The GSA is the federal agency in charge of all of the national government's real estate needs.

But real estate experts tell GlobeSt.com they imagined that more than 100 teams responded. That's because even though the profit margins on the deal are likely to be slim, it will be considered a coup to win. The government doesn't build that many new buildings in urban areas, several experts says, as they tend to be built in suburban locations.

Simpson FedExed a 225-detailed package to the five competitors. Among other things, the five finalists must get back to the government with pricing, the lease rate on the building and other details. The building, which the city will require to have retail on the ground floor, will have 25,000-sf floorplates, Simpson says.

The GSA doesn't plan to buy the land. Instead, it will be a tenant. Whoever wins the competition must agree to buy the land from Houston-based Hines, which controls the site, and raze a 406,000-sf empty post office building it. Because of the expense of buying the land and demolishing the building, several observers say that they are betting the Hines team will be the only one that can make financial sense out of the deal.

"I might be missing something, but I don't see how anyone other than Hines could do this deal," one prominent Denver developer tells GlobeSt.com.

The building must be Leadership in Energy and Environmental Design--better known as LEED--certified. That also will add to the expense of the building, anticipated to cost between $50 million and $70 million.

The GSA is scheduled to choose a winner on Aug. 15. The EPA building is only one of two user deals moving forward in Downtown. The other is the Denver Newspaper Agency, which plans to build a 300,000-sf building at Colfax and Broadway for the Rocky Mountain News, the Denver Post and the EPA.