Office of Real Property Asset Management GSA Portfolio Overview January 2009

Office of Real PropertyAsset Management

GSA Portfolio Overview

January 2009

GSA – Federal Agency Update

U. S. General Services Administration

The US General Services Administration leverages the buying power of the federal

government to acquire best value for taxpayers and our federal customers. We

exercise responsible asset management. We deliver superior workplaces, quality

acquisition services and expert business solutions. We develop innovative and

effective management policies.

GSA – Federal Agency Update

U. S. General Services Administration

•Public Buildings Service (PBS)

•Federal Acquisition Service (FAS)

GSA – Federal Agency Update

U. S. General Services Administration

What’s going on TODAY?

1. Presidential Transition2. Economic Stimulus

Package

GSA – Federal Agency Update

U. S. General Services Administration

Public Buildings Service (PBS)

One of the largest and most diversified public RE organizations in the world.

•In 2,100 communities

•6,197 employees

•About 30 appraisers

GSA – Federal Agency Update

1,513 Owned Buildings; 176 million RSF

7,106 Leased Bldgs; 175 million RSF

Over 1,000,000 workers in PBS space

420 historic buildings, including 63 National Historic Landmarks

GSA – Federal Agency Update

PBS in your communityCustomers (major)

JusticeJudiciaryTreasuryDefense

Homeland SecuritySocial Security

InteriorHealth and Human

ServicesEducation

EPA……and many more

Good Neighbor ProgramArts in Architecture

Design ExcellenceDay Care

26%

4%7%

16%

1800 1941 1945 1979 1993world war II

great society contemporar

y

design excellence

historic

Construction Era Owned Inventory

46%

Historic 1810 – 1941

US CourthouseSan Juan, Puerto Rico

Alexander Hamilton Custom House

New York, NY

World War II 1942 – 1949

Federal CenterKansas City, MO

Federal CenterAuburn, WA

Great Society 1950 – 1979

Federal Building and CourthousePhoenix, AZ

Federal Building

Los Angeles, CA

Contemporary 1980 – 1993

Thomas O’ Neill Federal BuildingBoston, MA

Alan Bible Federal BuildingLas Vegas, NV

Design Excellence 1994 – Present

Lloyd George CourthouseLas Vegas, NV

Federal CourthouseIslip, NY

Portfolio Trends

• Increase in square footage

• Decrease in number of buildings– New inventory and disposals– Lease consolidations/expansions

• Decrease in owned vacancy

• Maintained record low vacancy in leased

Space Trends

RSF (in millions)

176

176

180

176.3176

160 167

177.5

145

150

155

160

165

170

175

180

185

2003 2004 2005 2006 2007 2008

Fiscal Year

RS

F Owned

Leased

Space Trends

New Construction

FY02 FY03 FY04 FY05 FY06 FY07 Total

# of Assets 7 2 8 3 5 9 34

Rsf (in millions) 1.8 0.4 1.3 0.6 1.2 5.9 11.3

Cost (in millions)

$483.6 $163.9 $496.9 $110.9 $860.9 $1,983.6 $4,099.7

Reported Excess

FY02 FY03 FY04 FY05 FY06 FY07 Total

# of Assets 94 48 35 26 55 13 271

Rsf (in millions) 5.8 1.4 2.0 2.4 2.2 0.3 14.1

Liability Avoided (in millions)

$171.4 $75.9 $8.8 $184.3 $147.5 $24.0 $611.9

$ Proceeds (in millions)

n/a n/a n/a $5.3 $51.9 $82.2 $139.4

New Inventory

Disposal

Vacancy Trends

GSA Vacancy

8.30%

7.00%7.70%

6.80%

1.40%1.10%1.40% 1.20%

4.20%4.40%4.10%5.10%

1.0%

3.0%

5.0%

7.0%

9.0%

2003 2004 2005 2006 2007 2008

Fiscal Year

Vacan

cy

Owned

Leased

Total

Financial Trends

• Revenue increase driven by leases– Owned increased by almost 3% or $92M– Leased increase over 5% or $241M

• Growth in expenses outpaced revenue– Owned expenses increased by 4.4%– Leased expenses increased by 6.0%

• Leased FFO was negative for the second consecutive year

Financial Trends

Direct Revenue ($ in millions)

3,454

8,324

3,359

3,162 3,242

4,8704,6294,185

3,743

7,9887,428

6,905

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2003 2004 2005 2006 2007 2008

Fiscal Year

Reven

ue

Owned

Leased

Total

Financial Trends

FFO ($ in millions)

1,664.01,644.0

1,433.9

1,672.5

-41.0-1.689.345.0

1,623.01,642.8

1,761.8

1,478.9

-50

450

950

1,450

1,950

2003 2004 2005 2006 2007 2008

Fiscal Year

FF

O

Owned

Leased

Total

Office of Real PropertyAsset ManagementOffice of Real PropertyAsset Management

Reinvestment Liabilities

• Realities• Needs• Funding• Inflation

September 2008

Reinvestment Realities

• Increasing construction costs

• Limited funding

• Large (expensive) national priorities

• Leasing for many long-term requirements

FY2007 Reinvestment Needs

Breakdown of $7.4 B Reinvestment Need

($ in millions)

1 - 2 Years, $2,700

3 + Years, $2,600Immediate Need,

2,100

Reinvestment Funding

Reinvestment Funding (BA54/BA55) ($ in millions)

869722

961

991

618

1,029

814

$0

$200

$400

$600

$800

$1,000

$1,200

2002 2004 2006 2008

Fiscal Year

Office of Real PropertyAsset ManagementOffice of Real PropertyAsset Management

The Path Forward

• Limited Call for 2010• Core Asset Review• Leveraging Resources• Section 412 Authority

September 2008

2010 Limited Call

FY 200825 New Construction and R&A Projects - $1.3B Total32 Lease Prospectuses (including lease alterations)Focus on unresolved issues: i.e. Billings Courthouse

FY 200914 New Construction and R&A Projects- $1.3B Total67% of the projects submitted by the regions did not advance56 Lease Proposals. Most are still under reviewStimulus package impact?

FY 2010Expect 2010 Budget, at best, to resemble 2009 (Stimulus package

impact?)49 New Construction and R&A Projects identified for Directed Call

Core Assets

Core Assets

Financial Performance

Strategic Assets

Investment Rating

Historic Portfolio

Historic Portfolio vs. Total Core Assets Portfolio

Legacy PortfolioLegacy

Percentage

Building Count 217 1424 15%

RSF 43,452,990 177,238,075 25%

PCS $ 2,020,335,518 $ 6,262,672,024 32%

IRIS $ 3,589,177,569 $ 7,724,416,313 46%

NOI $ 461,517,668 $ 2,082,079,066 22%

BA54, 55, 64 obs (FY05 - FY07) $ 1,645,758,459 $ 5,416,212,359 30%

Historic Portfolio (cont.)

Historic Portfolio – Core Asset Holding Periods

>15 Long Term6-15

Transition0-5 Short

Term Grand Total

Building Count 180 32 5 217

RSF 40,660,686 2,155,433 636,871 43,452,990

PCS $ 1,859,459,187 $ 92,287,085 $ 68,589,246 $ 2,020,335,518

IRIS $ 3,256,743,864 $ 172,143,341 $ 160,290,364 $ 3,589,177,569

NOI $ 454,953,383 $ 7,557,812 $ (993,527) $ 461,517,668

BA54, 55, 64 obs (FY05 - FY07)

$ 1,575,221,895 $ 57,214,005 $ 13,322,559 $ 1,645,758,459

Capital Needs

– New Construction $16.3 B .• Courts $2.5 billion• CBP $4.9 billion• Executive Agency Priorities $4.8 billion• Acquisition & New Construction $4.1 billion

– R&A $8.1 B .• R&A pipeline projects $5.1 billion• Additional immediate repair needs $3.0 billion• Limited scope projects & energy mandates $0.9 billion

TOTAL NEEDS $25.3 B

Sources of Capital

• Traditional Sources• Rent• Direct Appropriations

• Existing Authorities• Historic Outleasing• ESPC• 412• Disposal (exchanges, outlease)

• New Authorities• Leasing

• (credit tenant leasing) purchase options

• Stimulus Package???

GSA – Federal Agency Update`

Real Property Asset Management

$2 to 3 Million$2 to 3 Million

annually for individual contracts

for appraisal services

3 Appraisal Programs:•Fair Market Value (FMV) and Acquisition•Fair Annual Rent (FAR)•Property Disposition, Utilization

GSA – Federal Agency Update

Dwight D. Eisenhower Executive Office Building

Old Post Office

U.S. Department of Justice

Visit www.gsa.gov and

www.govsales.gov

GSA – Federal Agency Update

Oklahoma City Federal Building

SSA Call Center; adaptive reuse, Auburn, WA

Center for Drug Evaluation and Research, FDA, White Oak, MD

Kansas City IRS; Lease construction

GSA – Federal Agency Update

GSA National Appraisal Program Contacts:

Acting Chief Appraiser and Disposal Appraisal ProgramNicholas S. Hufford, MAI, CAENicholas.hufford@gsa.gov202-501-2055

Market Value Appraisal Program:John N. Libeg, MAI, SRAJohn.libeg@gsa.gov202-208-0746

Fair Annual Rent ProgramJay KoepfJay.koepf@gsa.gov202-219-3052Also see Regional Contacts list

GSA – Federal Agency Update

Web Resources:USA website http://www.usa.gov/

GSA website http://www.gsa.gov/

Central contractor registration http://www.ccr.gov/

Federal contracting opportunities http://www.fedbizopps.gov/

Get DUNS number http://www.dnb.com/US/duns_update/index.html

GSA Online RE auction http://auctionrp.com/auctions2/

More government sales http://www.govsales.gov/html/index.htm

GSA – Federal Agency Update

GSA – Federal Agency Update

THANK YOU!

Nicholas S. Hufford, MAI, CAEActing Valuations Director and National Appraiser for Property DispositionGeneral Services Administration Public Buildings Service Office of Real Property Asset Management Valuations Division1800 F Street NW, Suite 7300Washington DC 20405

202.501.2055202.631.2751 cell202.219.9166 fax

Nicholas.hufford@gsa.gov