GOVERNMENT REAL ESTATE LEASING OVERVIEW: PART TWO
By Jamie Scruggs, Government Lease Advisors
Regardless of whether a government agency is required to compete its real estate leases, it will most likely follow some type of internal authorization process to start the lease transaction process for a government tenant going into a private-sector leased space. These internal authorizations will take the form of an approval process that requires the government agency to formally authorize the government tenant or government real estate agency handling the government lease to determine the following items before getting started on the new real estate lease action:
1. The estimated budget for the lease term, including lease rents and leasehold improvements;
2. How the budget will be funded;
3. Lease term;
4. Geographical area the leased space is to be located in;
5. Any additional special requirements that may be required such as secured parking, building setbacks, and LEED certifications.
At this point in the process, after the initial tenant agency approvals are completed, the decision-making process can split off in multiple directions. Smaller government agencies may be able to immediately select their desired property location along with signing the property owner’s lease, while larger government agencies may need to take a more detailed and lengthy approach to their leasing activities. Government entities like the US federal government will undertake a detailed and comprehensive approach to their real estate leasing activities for even the smallest leases. The standard approach for large government agencies at the state and federal levels after the approval process is:
1. Assign the leasing action to a government leasing contact (GLC) to start the new lease transaction.
2. The GLC will determine the lease forms and process specific to the lease size and standards specific to the government tenant.
3. Advertise the lease requirement if required.
4. Visit properties or have property owners submit property information that can be used to select the winning property.
5. Conduct a competitive procurement or approval process that determines which property owner will be awarded the lease.
6. The GLC will make the award of the lease to the property owner, which will either be on the government tenant’s lease form or the property owner’s own lease document.
7. The leasehold improvements, which are the shell and tenant improvements to the leased space based on the tenant’s design intent drawing, will then be completed, along with acceptance and occupancy of the leased space.
Jamie Scruggs is a nationally recognized expert on GSA leases and works with property owners and brokers on government real estate leases and property sales throughout the US. Jamie has been involved in thousands of government real estate leases and can assist you with your government real estate lease needs. Jamie is the author of The Complete Guide to Government Real Estate Leasing: Volumes I & II.
Jamie can be reached at 202-587-5654, firstname.lastname@example.org.