Disposing of Unneeded Federal Real Estate

May 2011

• Funding challenges• Executive Order 13327• Space optimization• Energy management and sustainability• Metrics and benchmarks to evaluate performance

and decision making• Excess or underutilized real property

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Executive Order 13327

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• EO 13327 directs executive agencies to develop and use Asset Management Plans to determine whether real property holdings are sufficient for or in excess of what is required to satisfactorily fulfill their operational missions.

• Plans must be made to dispose of the excess real property inventory.

• Proceeds from that disposition (if any) are to be returned to the general funds of the Treasury.

Funding challenges

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YES!

But we need to figure it out!

And we will.

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$3 billion by 2012

President ‘s June 2010, memo directed Federal agencies to reduce space in a cost conscious manner in order to save $3 billion by 2012 through:– disposing of unneeded Federal real estate, – increasing sales proceeds, – cutting operating costs – innovative workplace strategies and, – improving energy efficiency.

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Additionally agencies shall

• immediately adopt a policy against expanding data centers beyond current levels

• develop plans to consolidate/significantly reduce data centers within 5 years

• take immediate steps to make better use of remaining real property assets

• eliminate lease arrangements that are not cost effective

• pursue consolidation within and across agencies in common asset types

• increase occupancy rates through innovative approaches

• identify offsetting reductions in inventory when new space is acquired

• align with and support the actions to measure and reduce resource use and greenhouse

gas emissions in Federal facilities pursuant to Executive Order 13514

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Disposing of Unneeded Federal Real Estate

• We need to look at the way we work differently and adopt policies to reflect that.

• It’s time for the Fed to get creative.

• Increase utilization by engaging a mobile workforce.

• Make technology work for our workforce.

Space Optimization

“When I first saw this memo, I thought it was just

about another way to save money.”

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But then the pieces fell into place. It brings together so many of our priorities. It is a threshold into an exciting new future.

This is so much more than saving money.

It touches on so many issues: cutting costs are part of it, but only part• it is about introducing a new workplace culture where mobility and

collaboration are the norm• it is about rethinking and redesigning the workplace• its about being green and our green proving ground initiative• it is about implementing new technologies• it is about leadership at a time that requires creative solutions• it is about developing new relationships with our Federal counterparts • it is about introducing new strategies to getting work accomplished• it is about overcoming resistance to change• and, most of all its about increasing productivity for our workforce.

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• Does your real estate effectively support your mission requirements? – If so, how? If not, what are the issues?

• What innovative ideas are you doing to help you realize cost savings?

• What are you doing to emulate success stories and best practices?

• Can you pilot some of these best practices on one office or bureau?

Setting the Stage

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Our Approach to Analyzing Opportunities

• Operating $/SF• Energy Use/SF• Low Utilization

(Employees/SF)

• Low Mission Impact

• Low Risk

• High Mission Impact

• High Risk

Step 1: Identify buildings with poor performance and low mission impact/risk

Step 2: Buildings are mapped to look for opportunities:• Consolidation• Improved work space efficiency• Collocation

Impediments

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Mission

Skilled StaffProcessesGuidance

Resources:• Facilities• IT Infrastructure• Funding

Client Agency

• Disruption to operations (short term risks to mission)

• Aligning improvements/consolidation with agency’s long term strategy

• Inter Office/Bureau/agency cooperation• Cultural resistance to change from staff

• Time required to involve stakeholders in schedule

• Technology required to support improvements/consolidations

• Budget Constraints

Challenges

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Case Example- GSA Headquarters

• Challenge– Administrator Johnson challenged the agency to combine all GSA

operations into the GSA HQ building, representing a 160% increase in space utilization

• 4 locations, total of 6000 staff, 2600 seats• Mobility

• Response– GSA piloted several concepts to try to find the correct mix of productivity

and office utilization

• Expected Results– The GSA HQ building is being renovated to accommodate an increase in

capacity and a new way of working– 800 GSA staff are residing in the building during the phased renovation

to reduce transition costs of swing space

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Case Example - FAA

• The Challenge– Consolidate operational air traffic advisory services

provided by 58 Automated Flight Service Stations (AFSSs)

• The Response– Developed plans to discontinue operations at 42 AFSS

locations, many housed in leased buildings at airports

• The Results– FAA reduced AFSS leased space from 515,766 rsf to

115,000 rsf with estimated annual savings of $3,489,935

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• Short term opportunities– What can be disposed of immediately? – What needs to be done to get the properties

on your FRPP excess list to be disposed or demolished?

– Expiring leases

Opportunities

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XXX Excess Facilities by GSF –

Data Selection:- using Organization is XXX,Exclusions:- “Land” property type- “Service” (other than buildings)- “Storage” (other than buildings)

property use

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Number of Facility Leases by Lease Expiration Year

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Agency Space trends

• Historic Data based on assignable RSF - Active buildings, – Differs from FRPP, which includes GSF(not RSF) for Active and Excess.– Differs from Budget Figures, which are billable RSF only.

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

172.1 175.6177.9

184.4

191.4193.0

199.8

203.7

174.4176.6 176.6 177.1

178.8181.5

183.0 184.1Leased

Owned

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Average Energy Use per XXX Region

11 8 6 1 10 2 3 5 7 9 40

50000

100000

150000

200000

250000

Average of BTU/GSF

Region

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Operating Costs of XXX Occupied Owned Space

GSA REGIO

N NIN

E

GSA REGIO

N EIG

HT

GSA REGIO

N TEN

GSA REGIO

N FIV

E

GSA REGIO

N SIX

GSA REGIO

N SEVEN

GSA REGIO

N ONE

GSA REGIO

N FOUR

GSA REGIO

N TW

O

GSA REGIO

N ELE

VEN

GSA REGIO

N THREE

0

1

2

3

4

5

6

Average Operating Costs of XXX Owned Space

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• Longer term opportunities– Back office functions in high value real estate– Geography opportunities– Technology opportunities– Expiring lease opportunities– Leveraging mobile workplaces– Are there interagency opportunities?

Opportunities (continued)

XXX Low Utilization Properties in High Value Markets

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-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

11 03 07 04 08 05 09 06 02 10 01Sum of Assigned RSF 2,508,5 1,522,8 577,068520,348501,378501,318494,425457,445347,725262,362223,950

Count of Real Prop ID# 98.00 125.00 239.00 170.00 173.00 126.00 107.00 101.00 88.00 89.00 73.00

Ass

igne

d RS

F

GSA Properties by Region (Owned/Leased) - All Types

Geography of Portfolio

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Mobility and Space Utilization

• Space per person measure as the key performance metric

• Private Sector Median is 193 USF/person vs. Government Benchmark of 190 USF/person – we need to begin thinking of people per workstation as we become mobile.

• More efficient design of space has reduced the typical workspace since the early 2000s from about 250 USF/person to around 190 USF/person – but the world is now my workplace!

• Alternative workspace strategies and wireless technology have increased associates per workspace, resulting in a reduction in operation and maintenance costs and an increase in workforce morale

• Alternative workspace arrangements have become crucial parts of many organization’s continuity of operations (COOP) strategies

• The President and Congress have strongly encouraged teleworking and federal agencies have responded with positive results – we’re headed beyond telework to mobility!

• Hoteling and Desk Sharing are emerging strategies to connect mobile workers to a permanent office - work is what you do not where you do it .

Utilization Benchmarks & Strategies

Benchmarks vs. Federal Agency Guidelines

Agency Cubicle/Shared Office Source

Business Services/Consulting 40 USF/person 40 USF/person A/E Design FirmTelecommunications 65-90 USF/person

150-225 USF/person CRE Division of Communications Company

Manufacturing 48 USF/person120-380 USF/person

CRE Division of Electronics Manufacturing Company

Domestic Govt. Organization 64-80 USF/person 80-400 USF/person Security Division, HQs of U.S. Gov't Agency

International Govt. Organization 52 USF/person 60-105 USF/person FM Division of Public Health NGOAcademic Institution

30-160 USF/person

160-400 USF/person Large Campus University or College

Northeast County Government 60 USF/person125-250 USF/person Agency of County Government

Diversified Manufacturer 56 USF/person150-400 USF/person Fortune 200 Manufacturing Firm

Media Conglomerate 64 USF/person150-225 USF/person Fortune 100 Television and Internet Company

Business Services/Consulting 70 USF/person140-400 USF/person Leading Management Consulting Firm

NIH NIH Policy ManualFAA FAA Administrative Space GuidanceArmy Army Regulation 405-70, Chapter 5-4Coast Guard USCG RP Asset Management ManualNASA NASA Real Estate Management ProgramUSDA USDA Space Management PolicyFe

dera

l Age

ncy

Gui

delin

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arks

*

160-190 NASF/person152.5 OSF/person

130 NASF/person or less135 SF/person

110 NSF/person150 SF/person

*Benchmark figures are further discussed in GSA Workspace Utilization and Allocation Benchmark Report

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CBRE “No-Fly Zone” Concept

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• Commitment to refine plans to meet Presidential Memo goals

• Civilian Property Realignment Hearings• Expect OMB to issue targets• Tools/benchmarks

– Census– Resource List

Next Steps