Real Estate and Leasing Expertise Lead to Big Savings in Mid-Atlantic Region
The Public Buildings Service (PBS) provides workplace solutions for our clients at the best value to the American taxpayer, acquiring space on behalf of the federal government through new construction and leasing.
To save taxpayer money, we apply integrated real estate expertise and knowledge of the market to negotiate lease rental rates below market in every transaction. PBS captures this effort through the Lease Cost Relative to Market (LCRM) measure, which compares the net present value (NPV) of GSA lease transactions to the NPV of similar leases using private sector market rental rates.
Here in the Mid-Atlantic Region, a cross-divisional team of leasing experts plan, execute, and monitor evaluation of lease rates for maximum savings. The team developed a tracking and forecasting tool that produces real-time rental rate reports, providing forecasted and actual LCRM results throughout the year. They also maintain an internal resource website that serves as a one-stop-shop for the GSA leasing community to find all information related to the LCRM measure.
Our Region’s proactive approach is driving down costs and delivering best value to our client agencies. In fiscal year (FY) 2016, 82% of the Mid-Atlantic Region’s lease transactions were negotiated at rates below market, saving over $6 million in rent. The rent rates were nearly 15% below market averages.
For first quarter FY17, 100% of the Region’s leased transactions were below market rates, reflecting a savings of over $3.7 million in rent. These rates are 31% below market averages. On the current path, we forecast surpassing last year’s regional savings.
Our LCRM efforts are recognized by GSA nationally as a best practice; they are a replicable process that set the groundwork for successful leasing outcomes now and in the future.
Through real estate expertise and an emphasis on market research, Mid-Atlantic PBS continues to use the purchasing power of the federal government to reduce costs for our client agencies. As a result, our partners can focus their resources and attention on their core missions.