T
he federal government's real estate portfolio is ripe for a major overhaul, with many buildings languishing in disrepair and underutilization. As the Washington D.C. real estate community keenly feels, it's time to rightsize the government's property holdings and focus on disposing of unneeded assets.
In my 35 years working in federal real estate, I've never seen as much momentum behind optimizing the portfolio as there is today. The recent public meetings hosted by the D.C. deputy mayor for planning and economic development, the Public Buildings Reform Board (PBRB), and the Federal Real Property Association have brought together stakeholders to seize this opportunity.
However, before any buildings can hit the market, several complex factors must be addressed. A thorough portfolio analysis is needed to determine which properties to retain or dispose of, as well as identifying funding for consolidations and relocations. But even once these hurdles are overcome, the disposition process itself can be a lengthy and cumbersome affair.
Historically, it's taken anywhere from one to five years to complete the disposition process, with many steps mandated by statute. McKinney-Vento homeless assistance, discounted public benefit conveyances, environmental reviews, and historic preservation assessments all contribute to the complexity. To expedite this process, more attention and resources are needed – particularly for the small offices within the General Services Administration (GSA) and other primary agencies involved in disposal.
One potential solution is to get started sooner on assembling the necessary documentation for properties tagged for disposition. This could involve site surveys, plat maps, title searches, environmental assessments, and other key information. By doing so, the government can prepare these properties for sale more efficiently than in the past.
Another constraint in the disposition process is historic preservation. While federal agencies must consider the effects on historic properties, this can sometimes render a building unsellable due to high preservation costs. A more pragmatic approach would be to recognize that a property's future value may lie in its land rather than the building itself – allowing for negotiations to mitigate adverse effects and begin immediately.
Finally, greater coordination with local municipalities and stakeholders prior to sale can reduce entitlement uncertainty for buyers and increase the property's value. By recognizing likely future use as a key factor in disposal calculus, the government can streamline and accelerate the process while still meeting applicable legislation.
The time is ripe for the federal government to focus on real property disposal and do so in a way that benefits local communities. Stakeholders should capitalize on this momentum to transition these properties out of federal ownership and into the hands of those who can best utilize them.
