On Business - Tips for Working With the GSA

Winter 2010

Thomas H. Walker, PE, managing principal, Thomas H. Walker Consultants LLC, spoke at a Development ’10 panel on industrial and office tenants, offering these tips and insights for working with the General Services Administration (GSA):

  • The emphasis is on existing space.
  • The GSA is pressing for better deals in the marketplace, especially for renewals.
  • FBI deals are usually build-to-suit because of heavy security requirements but it will pay a lump sum in order to make the deal work.
  • A GSA regional commissioner can do a deal without asking anyone on transactions below $2.8 million in annual rent.
  • There is greater emphasis on a GSA deal being within a central business district.
  • The GSA requires LEED Silver for everything except EPA and DOE projects for which it wants LEED Gold and sometimes LEED Platinum.
Thomas Walker

Thomas Walker

  • When buying GSA developments, the buyer is paying a significant lease cap rate premium.
  • GSA has a 20-year limit on lease deals but it will renew them 98 percent of the time so that such a deal is in effect a 40-year deal. GSA will only move generally for three reasons: 1) the requirement no longer fits in the building; 2) closure of an agency in a particular locale (be careful of IRS deals because technology will force the agency to get smaller in the future); and 3) and poor building management.
  • Do it their way! To do a GSA deal, be prepared to do it the GSA way or not at all.