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GSA drives value for taxpayers on SSA lease

A family of four sits on a fireplace hearth holding two dogs with Christmas and Hannukah decorations around them.
Kory Hochler (right) poses for a photo with his family, dog Rosie, wife Julie, son Sam, dog Salvie, and daughter Sadie.

By Alison Kohler

KANSAS CITY, Mo. — A GSA employee’s experience, a favorable market, and a contract broker program all resulted in a real estate lease that benefited American taxpayers, a federal agency tenant that serves retired and disabled people, and a local lessor.

Taxpayer benefits

Money-wise, the $7 million lease award represented $1.4 million in cost savings to American taxpayers, who ultimately fund the cost of office space for federal agencies.

On March 24, GSA Lease Contracting Officer Kory Hochler signed the 15-year lease with KCO 2300 Main 520 LLC for about 20,000 rentable square feet at 2300 Main on behalf of Social Security Administration’s Office of Hearings Operations.

“The most notable thing was that we were able to get such a competitive rate,” Hochler said. “The rental rates were 27% below (what market data indicated), and we also secured 15 months of free rent.”

A multi-story building with a circle drive in front and a flagpole with a flag flying in the center.
Exterior of 2300 Main in Kansas City. Courtesy of Kessinger Hunter & Company, LC

Federal agency benefits

GSA uses GLS Plus (contracts with private brokers) for prep work before a GSA lease contracting officer negotiates with the leading offerors.

“I have a lot of experience,” Hochler said. “The broker does that front-end work. I can come in and really drive home, when it makes sense, to say ‘you’re going to need to do a little more to win this deal.’”

In the GLS Plus agreement, the broker gets a lessor-funded commission. The federal agency gets part of this commission as a rent credit.

“I find one of the best benefits for federal agencies is you have two different people negotiating on your behalf,” Hochler said.

Lessor benefits

One benefit for the lessor is having a stable tenant.

“The government is one of the best customers to have when you’re in private commercial real estate,” Hochler said. “The government is locked in, doesn’t go bankrupt, or doesn’t have a bad month. There is a value when you have (a government tenant) in your building to have that revenue stream. You don’t have to worry the government will stop paying rent.”

GSA expects SSA to move into the leased space in spring of 2022.

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Last updated: Apr 19, 2021
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