By Jamie Scruggs, Executive Director, Government Lease Advisors, Inc.
Working with the GSA AAAP portal for some real estate brokers and property owners can be a challenge. The broker is often tasked with aggregating the needed building data to make the portal inputs necessary for a property owner to be considered for award by the GSA. The following is a list of the various disciplines and the associated duties for the broker and property manager to consider when collecting information for the portal inputs, including the broker and property manager’s own role in the process. We assume that the roles of the inputs are tasked to the broker, the property manager, or a third party consultant such as Government Lease Advisors that has been hired to complete the portal inputs:
1. Real Estate Broker
The broker will typically have three GSA AAAP portal submittal scenarios to be aware of:
A. New GSA Requirement: The GSA advertises a new lease requirement that the broker is submitting the property for which the portal submittal is time sensitive.
B. Blind Submittals: The broker in this scenario will be submitting offers through the portal as a matter of advertising the space and rates to the GSA in the chance that the GSA will accept the offered space through the portal.
C. GSA Lease Renewal: The GSA contacts the property owner for them to use the portal for the lease renewal process.
2. Property Management
The property manager will need to be aware that the following items are needed for the portal inputs:
A. Operating Costs:
The PM will need to review the regional RLP and lease documents to understand how the operating costs are calculated for the portal inputs. The portal inputs usually require the separation of buildings operating costs between tenant operating costs and the building owners operating costs.
B. Shell Rents:
The PM will want to calculate the shell rent to include:
a. The property’s debt and profit.
b. Building operating costs, including the buildings real estate taxes, insurance, building maintenance and reserves, lease commissions, and management fees.
c. Shell construction budget, the GSA tenant will not typically pay for shell improvement items.
d. Commissions owed to the building owner’s broker. Currently it’s not common for the GSA to have a broker representing them on GSA AAAP lease acquisitions.
C. Tenant Improvements:
The portal inputs require the broker input an amortization amount that the portal will then automatically generate a tenant improvement cost per usable square foot. The PM will need to confirm with the lender what the amortization amount will be for the financing of both the tenant and shell improvements to the space.
D. Legal and Document Review:
The PM should be aware of the following documents that need to be reviewed before the broker submits the information in the portal:
a. The Request for Lease Proposals (RLP) documents:
The RLP is available for download in the portal. The RLP will describe the “what and how” of the GSA lease submittal process including references to ADA, ABAAS, seismic and Energy Star requirements.
b. The GSA AAAP Lease Sample:
The GSA has a GSA AAAP lease sample that is available for the property owner to download and review. It’s advisable for the PM to treat this lease as an actual lease that the property owner will be obligating themselves to if the GSA selects the space offered in the portal. Once the GSA contacts the property owner stating that the property has been selected the GSA will typically send an updated lease document for the owner to review.
c. Trade Agreements:
The PM will need to be aware that the broker will need to input amounts for the architect’s fees, lessors overhead and profit and the tenant operating costs. It’s a best practice to double check in the sample GSA lease what the tenant expects for their ongoing periodic services including janitorial requirements that may include daily cleaning.
The architect’s role is to first confirm what the correct usable and rentable square footage is for the offered space. The broker will be using usable square footage rates when completing the portal inputs so having accurate square footage counts makes this is a vital first step. The architect will need to work with the PM and the GC to coordinate any expected shell improvements needed so the GC and the PM can create an accurate expected shell construction budget. The architect should be given a copy of the lease and RLP documents to confirm the property meets the requirements of the lease.
4. General Contractor
The GC will play an important role in working with the architect and the PM on determining what the shell construction budget may need to be when coordinating the construction of the tenant improvements. Additional items that should be contemplated are restroom and common area upgrades needed to be compliant with ADA and ABAAS requirements.
5. GSA Tenant Requirements
The broker and the PM should be aware that if they are doing a portal submittal for a new GSA lease requirement that has been advertised that the portal inputs are generally geared towards that advertisements stated requirements. What this means for the broker is that the offered space will typically not be selected for the new GSA advertised lease requirement if it doesn’t meet the requirements of the advertisement.
6. GSA Contracting Officer
The broker should note that a GSA person will be assigned to their offer if it’s accepted in the portal. The GSA contracting officer will generally contact the broker to discuss what the next steps are for the offered space.
7. GSA Portal Inputs
The broker and the PM should confirm that the inputs are ready to include the information discussed above. The broker should understand that their will be differences between what’s in the GSA advertisement and the portal, these differences can include portal lease terms that may not match what’s in the GSA advertisement.
For more information on GSA AAAP portal submittals you can contact Jamie Scruggs with Government Lease Advisors, Inc. who has been completing GSA leases with property owners since 1998. Jamie can be contacted for a no cost consultation at 202-587-5654 or firstname.lastname@example.org. Visit gsaleasing.com for more information.