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GSA Awards National Leasing Contracts Covering Up to 40 Million SF

Feds Target 5% Reduction in Govt.-Leased Space Over Next Five Years
October 7, 2015
Chris Wisner, GSA's assistant commissioner for leasing, oversees the Leasing Support Services contracts program.
Chris Wisner, GSA's assistant commissioner for leasing, oversees the Leasing Support Services contracts program.
The U.S. General Services Administration (GSA) this week awarded nine GSA Leasing Support Services (GLS) contracts to six brokerage firms across the country, including a pair of small businesses.

Formerly called the National Broker Contract, the revised program, under which GSA uses outside real estate brokers to help it negotiate lease deals with private landlords, is the third incarnation of the program and includes changes intended to better reflect GSA's renewed focus on downsizing, consolidation and lease reform.

The selected firms are: Carpenter/Robbins Commercial Real Estate Inc. (small business); CBRE Inc.; DTZ Americas Inc.; Jones Lang LaSalle Americas Inc.; Public Properties LLC (small business); and Savills Studley Inc. They will split leasing assignments for federal tenants over the next year, with options to extend annually for four years.

For this generation of the broker contract, GSA changed the award structure by increasing the number of contracts and awarding them by geographic zones (rather than nationally as previously done under the program.) Under the previous contract, four brokerage firms were issued task orders across the country.

By switching to the new zone approach, GSA hopes to deliver better service to its federal tenant clients and more market-specific expertise from the brokerage firm contractors, while also making it easier for small businesses to compete for prime awards, said Chris Wisner, GSA’s assistant commissioner for leasing. Each of the firms is asigned to one or more zones: North, South, West and National Capital Region.

GSA said the new GLS program is expected to handle approximately 30 million to 40 million square feet in task orders. GSA estimates it will utilize the program to handle 51% of its high- and moderate-value lease acquisition workload during the life of the contracts.

For price evaluation purposes, the GSA estimated that annual commissions per Zone would be based on needing 5% less space than government agencies currently lease.

Combined task orders from the contracts could net the six firms a maximum of $276 million in commissions on 1,553 task orders over the course of the contracts. At a minimum, the brokerage firms are guaranteed $135,000 in broker commissions on 54 task orders.

The federal government does not make any direct payment or reimbursement to the contractors. As is rtypically the case in the private sector, the broker commissions are paid by the building owners.

Since the program’s inception, the GSA estimates it has saved taxpayers $250 million in rent cost avoidance through the reduction of federal agency rental payments, although government auditors have said it is not clear if using private brokers to secure leases is less expensive than using its in-house leasing staff.

GSA made awards in the following four zones.
Northern Service Area


Jones Lang LaSalle Americas
CBRE

Southern Service Area


Savills Studley
Public Properties

Western Service Area


Carpenter/Robbins
DTZ Americas

National Capital Service Area


CBRE
Jones Lang LaSalle Americas
Savills Studley

GSA Leasing By the Numbers


(Source: GSA)
GSA’s current lease portfolio contains over 8,400 leases, with an annual rent outlay of $5.6 billion.
$18 billion - Total contract value of leases awarded.
$214.9 million - Total commission credits passed on to tenant agencies.

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