Transportation and Infrastructure Committee: State of Federal Real Estate - March 22, 2023

This a roundtable of the Subcommittee on Economic Development, Public Buildings, and Emergency Management.
Participant List:
Nina Albert, Commissioner, Public Buildings Service, General Services Administration (GSA)
David Marroni, Acting Director, Physical Infrastructure, Government Accountability Office (GAO)
The Honorable Michael Capuano, Public Buildings Reform Board
David L. Winstead, Public Buildings Reform Board
Derrick Mashore, Senior Vice President, Advisory and Transaction Services, CBRE
Chad Habeeb, Principal, Director of Leasing, FD Stonewater, LLC
Kay Sargent, Director of WorkPlace, HOK
Timothy O. Horne, EVP, Portfolio Management, Head of Denver Office, Boyd Watterson Asset Management, LLC
Opening remarks, as prepared, of Economic Development, Public Buildings, and Emergency Management Subcommittee Chairman Scott Perry (R-PA):
The goal of today’s roundtable is for us to discuss the lay of the land – so to speak – of Federal real estate. Ultimately, we need to make sure we are smart in our federal real estate decisions. Federal real property continues to be on the Government Accountability Office’s (GAO) high-risk list and, even before COVID, we had far too much empty space in our portfolio.
Unfortunately, the ongoing telework policies have only made this problem worse. Here are some basic facts.
Federal occupancy in the D.C. area alone remains below 50 percent of pre-COVID levels.
Nearly 30 percent of Federal employees live outside their assigned areas.
Thirty percent of Federal employees are expected to retire in the next five years.
More than 50 percent of the General Services Administration’s (GSA) leases are expiring in the next five years.
And we are getting growing reports of “shadow” space in both owned and leased buildings – space that is just simply vacant.
All of these circumstances set the stage for an opportunity to right-size Federal space and shed unneeded real estate. If the agencies aren’t using it, quite frankly, they should lose it. I know this Subcommittee, GSA, GAO, and private sector experts have been talking about this for a long time.
While there has been some progress, I believe there is much more we can and should do. Traditionally, this is a bipartisan issue and should be a no-brainer – if space isn’t needed, get rid of it. Underused and empty spaces not only waste taxpayer dollars but can have negative economic effects on the communities where they are located.
We need to get a handle on this. We need to know what the baseline is now – what is the state of Federal real estate – so we can identify opportunities, what the hurdles are, and where we want to end up.
Now, today, I want to focus our discussion on getting the lay of the land, including what does the real estate market look like right now, and what are the current market trends in office space? And what are the challenges and opportunities?
I hope the roundtable discussion today will better identify how the Committee can focus efforts to optimize space and save money.