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Smaller workspaces, offices in feds’ future

Oct. 19, 2012 - 05:56PM   |  
By ANDY MEDICI   |   Comments

Enjoy that office space you have now — it may start shrinking soon.

Tens of thousands of federal employees around the country may find themselves in smaller digs in the coming years as agencies look to shrink their leased-space inventories.

One recent example: congressional approval of a 191,000-square-foot FBI lease in Atlanta that would consolidate up to 1,800 employees into one office. Workers would be limited to 105 square feet per person — a big reduction of elbow room.

The average fed today works in about 190 to 200 square feet of space.

Experts agree that agencies will slowly but surely reduce the amount of space they use, although it will take years for many agencies.

Chris Roth, international director for real estate company Jones Lang LaSalle, said the General Services Administration will begin making significant progress in reducing its leased portfolio over the next few years.

He said the agency has a higher-than-usual number of leases expiring in 2014, which will allow it to significantly reduce its inventories as part of the lease-renewal process.

“I think we are going to see a gradual decline in leasing through 2014 and a greater number of lease consolidations,” Roth said.

He said GSA will have to do more to help agencies reduce their footprints as they seek to reduce property spending.

The potential for savings is significant: The Internal Revenue Service alone can save more than $111 million in real estate costs over the next five years by reducing its real estate footprint, according to a Sept. 24 report by the Treasury Inspector General for Tax Administration.

The Health and Human Services Department also directed agencies in early 2011 to reduce space from an average 215 square feet per person to 170 square feet, a requirement it will incorporate into its new leasing and construction decisions.

Kurt Stout, executive vice president for government solutions at real estate firm Colliers International, said he has not yet seen agencies significantly reducing their leased spaces, but he expects to see more signs of this in the coming months. Until now, agencies had been more focused on curtailing their growth in leased space, not on actually reducing their existing portfolios.

“There are certainly some lease reductions happening, but it’s going to take awhile to see much more of it,” Stout said.

He said Congress keeps trying to crack down on leased space, but legislative efforts keep stalling.

Rep. Jeff Denham, R-Calif., chairman of the House public buildings subcommittee, said Congress needs to take action to rein in the growth of unneeded federal property.

Denham is the author of the Civilian Property Realignment Act, which would accelerate the disposal of leased property by relying on a commission to group excess properties for quicker sale. The bill passed the House this year and is awaiting action in the Senate.

“It’s past time the administration demonstrate real leadership by calling on the Senate to pass this common-sense legislation to reduce our federal footprint and save billions of taxpayer dollars,” Denham said.

Another bill by Denham and Transportation and Infrastructure Committee chairman John Mica, R-Fla., would require GSA to reduce its building inventory by 1 million square feet annually through 2016 and offset any new space with an equal reduction in existing space.

The administration has taken some steps to rein in excess leasing.

Agencies were required to save $3 billion in real estate costs by this month under a presidential June 2010 memo directing agencies to reduce their real estate footprints. President Obama in May released another memo saying that the Office of Management and Budget will approve new space only if it is offset by office consolidations, co-locations or sell-offs of office space.

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