FEDERAL REAL PROPERTY ASSET MANAGEMENT sponsored by THE

FEDERAL REAL PROPERTY

ASSET MANAGEMENT

sponsored byTHE ASSOCIATION OF GOVERNMENT ACCOUNTANTS

in cooperation with its Corporate PartnerTHE AMERICAN APPRAISAL ASSOCIATES

Researchers: Mr. Eugene Kaczkowski – Corporate Entities

Ms. Anna Miller – State EntitiesDr. Gail T. Young – Federal Entities

FEDERAL AGENCY AND ADMINISTRATION PARTICIPANTS

• Department of AGRICULTURE **• Department of COMMERCE **• Department of DEFENSE **• U.S. ARMY CORPS of ENGINEERS **• Department of EDUCATION• Department of ENERGY **• ENVIRONMENTAL PROTECTION AGENCY• GENERAL SERVICES ADMINISTRATION• INTERNAL REVENUE SERVICE **• Department of HEALTH and HUMAN SERVICES• Department of HOUSING and URBAN DEVELOPMENT• Department of the INTERIOR **• Department of JUSTICE **• Department of LABOR **• NATIONAL AERONAUTICS and SPACE ADMINISTRATION **• NATIONAL SCIENCE FOUNDATION **• OFFICE OF PERSONNEL MANAGEMENT **• Department of STATE ** • SMALL BUSINESS ADMINISTRATION• Department of TRANSPORTATION• Department of VETERANS AFFAIRS

• Footnote: ** Of the 21 Federal Agencies/Administrations contacted, 14 filled out the survey instrument. Thirteen of the 14 respondents identified their agency or administration and one chose to remain anonymous.

STATE GOVERNMENT PARTICIPANTS

• MARYLAND **• MINNESOTA **• MISSOURI **• TEXAS • UTAH **• WASHINGTON• WEST VIRGINIA **

• Footnote: ** Of the seven states contacted, six filled out the survey instrument. Five of seven respondents identified their state and one chose to remain anonymous.

CORPORATE PARTICIPANTS

• DUKE REALTY CORPORATION• EQUITY OFFICE PROPERTIES• TRANSWESTERN COMMERCIAL SERVICES• TRIZEC PROPERTIES INC.• WELLS REF

• Footnote: While several more companies were contacted, only those listed above filled out the survey instrument.

REAL PROPERTY ASSET MANAGEMENT PLAN

Does your agency have a real property asset management plan?

– Federal Agencies’ Responses• YES 11 78.6%• NO 3 21.4%

– States’ Responses• YES 2 33.3%• NO 4 66.7%

– Corporate Responses• YES 3 60.0%• NO 2 40.0%


• How long has your agency had its current plan in place?– Federal Agencies’ Responses

• Plan being developed 8 57.1%• Plan in place 1 – 12 months 5 35.7%• Plan in place more than 1 year 1 7.1%

– States’ Responses• Plan being developed 1 33.3%• Plan in place 1 – 12 months 0 0%• Plan in place more than 1 year 2 66.6% (Skipped this question) 3

– Corporate Responses• Plan being developed 0 0%• Plan in place 1 -12 months0 0%• Plan in place more than 1 year 3 100% (Skipped this question) 2


• Does your agency participate in Real Property Committees or Task Forces?– Federal Agencies’ participation in the Federal Real Property

Council• YES 14 100%

– States’ participation in Real Property Committees or Task Forces

• YES 3 50%• NO 3 50%

– Corporations’ participation in Corporate-Wide Committees on Real Property Asset Management

• YES 5 100%


• Does your agency participate in the following groups or any other Real Property Management Groups?

– Federal Agencies’ Responses

YES NO

• BOMA 4 (29%) 10 (71%)• IFMA 4 (29%) 10 (71%)• CoreNet 3 (21%) 11 (79%)• TWN 1 ( 7%) 13 (93%)• Other 9 (64%) 5 (36%)


• Does your state participate in the following groups or any other Real Property Management Groups?

– States’ Responses

YES NO

• BOMA 2 (33%) 4 (67%)• IFMA 1 (17%) 5 (83%)• CoreNet 0 ( 0%) 6 (100%)• TWN 0 ( 0%) 6 (100%)• Other 0 ( 0%) 6 (100%)


• Does your corporate entity participate in the following groups or any other Real Property Management Groups?

– Corporate Responses YES NO

BOMA 5 (100%) 0 ( 0%)IFMA 1 ( 20%) 4 ( 80%)CoreNet 3 ( 60%) 2 ( 40%)TWN 0 ( 0%) 5 (100%)Other 3 ( 60%) 2 ( 40%)

CHANGE IN APPROACH

• Have you recently changed your approach to real property asset management?

– Federal Agencies’ Responses• YES 10 71.4%• NO 4 28.6%

– States’ Responses• YES 2 33.3%• NO 4 66.7%

– Corporate Responses• YES 2 40%• NO 3 60%

Federal Real Property Asset Management High Risk Areas

• Realign and rationalize real property and dispose of unneeded assets

Federal States CorpNot Applicable 1 ( 7%) 1 (17%) 2 (40%)

Part Applicable 6 (43%) 1 (17%) 1 (20%)

Applicable 6 (43%) 4 ( 67%) 2 (40%)

Don’t Know 1 ( 7%) 0 ( 0%) 0 ( 0%)

Federal Real Property Asset Management High Risk Areas

• Address significant real property repair and restoration needs

Federal States CorpNot Applicable 1 ( 7%) 0 ( 0%) 1 (20%)

Part Applicable 5 (36%) 1 (17%) 2 (40%)

Applicable 7 (50%) 5 (83%) 2 (40%)

Don’t Know 1 ( 7%) 0 ( 0%) 0 ( 0%)

Federal real Property Asset Management High Risk Areas

• Develop reliable and useful real property

data

Federal States CorpNot Applicable 1 ( 7%) 0 ( 0%) 1 (20%)

Part Applicable 1 ( 7%) 1 (17%) 1 (20%)

Applicable 11 (79%) 5 (83%) 3 (60%)

Don’t Know 1 ( 7%) 0 ( 0%) 0 ( 0%)

Federal Real Property Asset ManagementHigh Risk Areas

• Resolve the problem of heavy reliance on costly leasing

Federal States Corp

Not Applicable 6 (43%) 0 ( 0%) 4 (80%)

Part Applicable 3 (21%) 2 (33%) 1 (20%)

Applicable 3 (21%) 4 (67%) 0 ( 0%)

Don’t Know 2 (14%) 0 ( 0%) 0 ( 0%)

Federal Real Property Asset ManagementHigh Risk Areas

• Minimize the impact of terrorism on real property

Federal States CorpNot Applicable 2 (14%) 0 ( 0%) 0 ( 0%)

Part Applicable 7 (50%) 2 (33%) 3 (60%)

Applicable 3 (21%) 4 (67%) 2 (40%)

Don’t Know 2 (14%) 0 ( 0%) 0 ( 0%)

Federal Responses to List the Three Highest Priority Changes to be made in

the next 12 to 18 months.

• Receive approval of Agency’s Real Property Asset Management Plan from OMB

• Categorize data into designated 23 data elements and establish an asset management data base

• Identify and include all space in a software program• Implement an automated real property asset

management system• Develop asset plans for individual sites based on

workspace standards• Identify core competencies for facilities managers

Federal Responses to List the Three Highest Priority Changes to be made in the next

12 to 18 months (continued)• Develop a sustainable and recapitalization model to

address deferred maintenance • Develop and implement a process for senior level review

of all component real property budgetary items• Develop performance measure targets/goals for all

components• Align property holdings with agency mission• Execute Base Realignment & Closure Act Agenda Items• Begin disposition of any unneeded real property assets• Continue to search for savings from those properties

leased through GSA• Establish standardize condition indices for various

business lines

State Responses to List the Three Highest Priority Changes to be made in

the next 12 to 18 months

• Establish a uniform automated and integrated portfolio management system based on the convergence of the separate real estate data systems in place

• Prepare an inventory and condition assessment of the real estate holdings

• Dispose of selected state buildings with high deferred maintenance

• Develop the Capital Budget using a Facility Condition Index and capitol planning module of the new facilities assessment software program

• Apply an owned vs. leased analysis to future office space decisions

Corporate Responses to List the Three Highest Priority Changes to be made in

the next 12 to 18 months

• Conduct an national operational audit of our Asset Integrity/Deferred Maintenance and emergency preparedness activities

• Provide for more efficient Capital Expenditures • Continued enhancement to customer service

process • Institute national purchasing• Purchase higher tech buildings

Management Tools, Techniques, and Incentives Federal agencies used to achieve better management of real property assets

• Bench-marking tools as used by industry• R&D programs condition indices integrated with the

budget process• Facilities Equipment Maintenance software• Computer-based Space Management system for

managing leased space, including date lease is expected to expire

• Specific agency authority to dispose of underutilized facilities

• Use tools for calculating (a) asset utilization prioritization, (b) current replacement value, & (c) performance metrics

Management Tools, Techniques, and Incentives Federal agencies are using to

better manage (continued)

• Use of decision making Asset Management Team with representation from each Administration/Bureau

• Use of web portal for all space assigned with drawings and ability to move employees without redrawing space

• Work space standards• Privatization partnerships with the private sector on

housing and utilities• Established expectations, track performance and involve

senior management• Real property resources aligned with goals and

expectations

Management Tools, Techniques, and Incentives States are using to achieve better

management of their real property assets

• Hired the services of a real estate consultant to perform an overall portfolio management review with the objective to achieve asset maximization

• Use of VFA facility assessment software and ARCHBUS FM software

• Use of software tools for (a) Property Management, (b) Project Management, (c) Fixed Asset Management, and (d) Preventative Maintenance

Management Tools, Techniques, and Incentives Corporate Entities are using to

achieve better management

• Use own management company• Use Angus Software• Identify and Track Key Performance Indicators, designed

to include important components of asset management and customer service

• Use Operational Audit tool and benchmarking• Use better controls, including review of data, market

conditions and projections

Federal Agencies’ Utilization of Currently Owned and Leased Real Property

• Alternative Usages by Federal Agencies

Federal State Corp

Never Use 2 (17%) N/A N/A

SometimesUsed 10 (83%)

FrequentlyUsed 0 ( 0%)

SkippedQuestion 2


• Alternative Usages to the Original Design

Federal State Corp

Never Used 1 ( 9%) 1 (25%) 2 (40%)

Sometimes Used 8 (73%) 2 (50%) 3 (60%)

Frequently Used 2 (18%) 1 (25%)

Skipped Question 3 2


• Use of Outleasing

Federal State Corp

Never Used 2 (18%) 0 ( 0%) 4 (80%)

Sometimes Used 9 (82%) 4 (100%) 1 (20%)

Frequently Used 0 ( 0%) 0 ( 0%) 0 ( 0%)



• Enhanced Use Leasing

Federal State Corp

Never Used 5 (45%) 2 (50%) 4 (80%)

Sometimes Used 6 (55%) 1 (25%) 1 (20%)

Frequently Used 0 ( 0%) 1 (25%)



Real Property Swaps

Federal State Corp

Never Used 3 (27%) 1 (25%) 3 (60%)

Sometimes Used 8 (73%) 2 (50%) 2 (40%)

Frequently Used 0 ( 0%) 1 (25%) 0 ( 0%)


Utilization of Tool, Techniques or Incentives

• Have you been impacted positively or negatively by the use of any of the above tools, techniques or incentives?

Federal State Corp

• Positively 8 (67%) 3 (50%) 2 (40%)

• Negatively 1 ( 8%) 1 (17%) 2 (40%)

• Don’t Know 3 (25%) 2 (33%) 1 (20%)

POSITIVE IMPACT OF USING TOOLS, TECHNIQUES AND INCENTIVES

• Federal Agencies’ Responses:• Freed up resources• Provided flexibility to use assets including people

resources in more effective ways• Property swaps allowed acquisition of needed property

without going to court• Allowed partnering with other Federal agencies for shared

use of land• Outleasing allowed for sale of natural resources• Space utilization rate has improved in some locations


• States’ Responses:– Higher Utilization of Assets and Higher Realized Asset Value

throughout the Life of the Asset– Reduction in the Amount of Square Footage Leased by 250,000

square feet and Reduction in Annual Rent by $2.2 million in first 10 months of implementation

– Outleasing generates approximately $3 million in annual revenue to the bond annuity fund as well as unmeasured economic and tax benefits

– Redevelopment or joint development of underutilized or vacant property in past 10 years has resulted in over $75 million in annual economic return


• Corporate Responses

– Refocus and rebalancing of owned assets portfolio– Utilization of Property Swaps enable tax efficient

transactions

ARE YOU PRECLUDED FROM USING ANY OF THE TOOLS, TECHNIQUES OR INCENTIVES REFERRED TO

IN THE EARLIER QUESTION

• Responses:

Federal States Corp

• YES 5 (45.5%) 2 (40%) 0 ( 0%)• NO 2 (18.2%) 3 (60%) 4 (80%)• DON’T KNOW 4 (36.4%) 0 ( 0%) 1 (20%)• SKIPPED QUES 3 1

LEGISLATIVE AND REGULATORY CHANGES RECOMMENDED BY FEDERAL AGENCIES

• Provide legislative authority to retain proceeds from leases of land and sale of land or structures

• Exempt reporting of off-site removals to HUD under McKinney Act based on history of no expressions of interest from homeless providers

• Change the Property Act to allow for outleasing and disposal of Federal facilities and retain proceeds for constructing new modern facilities or for deferred maintenance

• Streamline process for transferring title to GSA or other agencies - current process is cumbersome

LEGISLATIVE AND REGULATORY CHANGES RECOMMENDED BY FEDERAL AGENCIES

(continued)

• Provide authority to non-GSA agencies to allow for exchanges between Federal agencies

• Provide the ability to allow authority that is unwanted to lapse

• Reduce the environmental requirements to restore unneeded land to pristine condition before disposal

• Change the Recreational Use Legislation to return the user fees collected to the agency and establish an enterprise/revolving fund to maintain the facility/project

LEGISLATIVE AND REGULATORY CHANGES RECOMMENDED

• By the States:– Provide a financial incentive to the custodial agency

to dispose of excess assets

– Provide universal authority to sell or trade property– Provide flexibility and freedom to move in the market

based on timing and need that is controlled by administrative rules not statutory regulations

• By the Corporate Entities:– Reduce the SOX requirements

MANAGEMENT TOOLS, TECHNIQUES, AND INCENTIVES USED TO ACHIEVE BETTER

DISPOSAL OF FEDERAL REAL PROPERTY

• Special legislative authority to dispose of underutilized facilities and retain the proceeds for construction or deferred maintenance

• Partnering with GSA to release space where our utilization is above our accepted standard in line with our lease expirations

• Utilizing the agency’s Asset Management Plan to determine what real property assets we have and their mission dependency, condition, utilization & annual operating and maintenance costs

• Utilizing the agency’s Asset Management Plan and Ten Year Site Plans as well as economic development transfers

• Initiated a Total Business System Review to ensure that best practices are being followed in project management

• Establishing demolition as well as disposal targets

MANAGEMENT TOOLS, TECHNIQUES AND INCENTIVES TO ACHIEVE BETTER DISPOSAL

OF FEDERAL REAL PROPERTY (continued)

• Identifying property obsolescence and establishing a goal for routine disposals

• Tracking buildings and their planned usefulness and tracking funding needs to the budget

• Gave title easement in exchange for land management for right of way

• Established a Real Estate Management Information System

• Turned over title to property to the States to facilitate disposal when needed

MANAGEMENT TOOLS, TECHNIQUES AND INCENTIVES TO ACHIEVE BETTER DISPOSAL

OF STATES’ REAL PROPERTY ASSETS

• Use of web site for available state properties• Use of virtual auctions• Use of master developer to execute major

redevelopment of state assets• Marketing Transit Oriented Development opportunities at

major transportation networks• Real estate consulting service contract• Use of Open Market

MANAGEMENT TOOLS, TECHNIQUES AND INCENTIVES TO ACHIEVE BETTER DISPOSAL OF

CORPORATE REAL PROPERTY

• Ongoing Financial Analysis• Analysis of Local Leasing• Investing in the Marketplace• Maximizing Return on Investment

IMPORTANT LESSONS LEARNED BY FEDERAL AGENCIES REGARDING DISPOSAL

OF REAL PROPERTY ASSETS

• Lack of Incentives• Lack of acknowledgement of Budget Authority as

additional funding is frequently needed to meet disposal requirements

• Value in using the utilization reports before planning the disposal

• No one will identify excess or surplus property unless forced to do so – identification of surplus property can become very political

• Timing, Long Lead-Time Cost, and Due Diligence is very costly

IMPORTANT LESSONS LEARNED BY FEDERAL AGENCIES REGARDING DISPOSAL

OF REAL PROPERTY (continued)

• Better partnering with GSA is needed• It is complicated, time consuming and expensive• Environmental remediation is costly and time consuming• Costs related to the preparation of the property for

disposal are not recoverable• Importance of accurate and reliable real property data• Importance of obtaining legislative authority to dispose of

property and retain the proceeds• Magnitude (over 250) statutes that relate to the

Acquisition and Disposal of Real Property Assets

IMPORTANT LESSONS LEARNED BY FEDERAL AGENCIES REGADING DISPOSAL

OF REAL PROPERTY (continued)

• Federal Management Regulations (202) are confusing• Annual budgets do no contain adequate funding for the disposal of

unneeded real property• Implement a solid relocation plan• Establish a central contact to work with GSA to ensure space is

relinquished in the required timeframe• Follow up with local agency contact to ensure all items are removed

at time of space relinquishment and review monthly bill to ensure there are no additional rental charges after space has been relinquished

• It costs approximately $2 in alterations for every rent $ saved• Employees in the space are resistant to downsizing

IMPORTANT LESSONS LEARNED BY STATES REGADING DISPOSAL OF REAL PROPERTY

• Follow the Procurement Rules• Never allow any special treatment for any one (real or

perceived)• Inform all interested parties in the disposal of the real

property• Ensure clear Legislation exist that allows conveyance• Ensure that the legal descriptions are accurate• Have a clear understanding of the politics involved• Ensure that Local Government and elected officials are

informed of the disposal process

IMPORTANT LESSONS LEARNED BY STATES REGARDING DISPOSAL OF REAL PROPERTY

(continued)

• Agreements of sale that are contingent on planning and zoning modifications that require the state to be a co-applicant can be controversial

• Achieving fair market value in the sale is essential to maintaining the public’s trust and confidence in the state’s stewardship of its assets

IMPORTANT LESSONS LEARNED BY CORPORATE ENTITIES REGARDING

DISPOSAL OF REAL PROPERTY

• Prices are currently Higher than anticipated• Tenant Credit Profile must be good• Market Timing• Continual Analysis of Repositioning Strategies• Flexibility in Deal Structure

ABANDONMENT OF DISPOSAL POLICIES AND/OR PRACTICES

• Have you had to forgo or abandon improvement to your real property disposal policies and/or practices due to legislative or other restrictions?

Federal State Corp

• Yes 4 (33.3%) 2 (40%) 0 ( 0%)• No 7 (58.3%) 2 (40%) 4 (80%)• Don’t Know 1 ( 8.3%) 1 (20%) 1 (20%)• Skipped Ques 2 1

PERFORMANCE MEASURES

• Does your agency use performance measurements as it relates to Real Property Asset Management?

Federal State Corp

Yes 13 (100%) 4 (80%) 4 (80%)

No 0 ( 0%) 0 ( 0%) 1 (20%)

Don’t Know 0 ( 0%) 1 (20%)

Skipped Ques 1 1

REAL PROPERTY ACCOUNTING AND CUSTODIAL RECORDS

• Do you periodically reconcile the custodial real property records with the real property accounting records?

Federal State Corp

Yes 11 (84.6%) 3 (60%) 2 (40%)

No 0 ( 0%) 1 (20%) 1 (20%)

Don’t Know 2 (15.4%) 1 (20%) 2 (40%)

Skipped Ques 1 1

MAINTENANCE COSTS AND SYSTEMS

• Do you have an automated maintenance, repair and replacement schedule?

Federal State Corp

Yes 6 (50.0%) 5 (100%) 5 (100%)

No 5 (41.7%)

Don’t Know 1 ( 8.3%)

Skipped Ques 2 1


• Do you have a backlog of deferred maintenance?

Federal State Corp

Yes 10 (90.9%) 5 (100%) 1 (20%)

No 0 ( 0%) 3 (60%)

Don’t Know 1 ( 9.1%) 1 (20%)

Skipped Ques 3 1


• What is your maintenance backlog in terms of dollars or years?

– Federal Responses:• The five Federal agencies providing responses to this

questions were from low to high: – $ .5 Billion

– $ 2.0 Billion

– $ 4.5 Billion

– $ 7.0 Billion

– $47.0 Billion


• What is your maintenance backlog in terms of dollars or years?

– State Responses:

• The four states providing a response to this questions range from a low to a high as follows:

– Multi-Millions– $ 35.0 Million plus– $122.4 Million– $ 200.0 Million

– Corporate Responses:None of the Corporate entity chose to provide a response to this question.

CHARGES FOR USE OF SPACE

• Do you charge your cost center for the use of real property?

Federal State Corp

Yes 8 (57.1%) 3 (60%) 2 (40%)

No 5 (35.7%) 1 (20%) 1 (20%)

Don’t Know 1 ( 7.1%) 1 (20%) 2 (40%)

Skipped Ques 1

CHARGES FOR USE OF SPACE

• What is the allocation basis for the space charges?

Federal State CorpSquare Feet ofSpace Used 7 (77.8%) 3 (60%) 2 (67%)

Included in theOverall Overhead 0 ( 0%) 1 (20%) 0 ( 0%)

Other 2 (22.2%) 1 (20%) 1 (33%)

Skipped Ques 5 1 2

FEDERAL AGENCIES’ BEST PRACTICES

• List your agency’s Real Property Asset Management Best Practices.

– Annual Reviews and Reporting of Property– Automated Distribution of GSA Rent to Line Offices through cooperation

of Real Property System with Financial System Acquisition Review Board (a cross-functional senior level board)

– Real Property considered an Integral Part of the Agency’s Mission– Establishment of a Framework for Real Property Requirements that

Incorporates Risk Analysis associated with Various Options and Funding Levels

– Utilization of a Comprehensive Approach in terms of Looking at People, Places, and Things and Providing the necessary Investment in Support of the Agency’s Mission

– Utilization of Two Agency Design and Construction Agents


• List your agency’s Real Property Asset Management Best Practices (continued)

– Updating the Automated Real Property Management System– The Organization Structure Designed to facilitate Better

Management of Real Property– Use of Bench Marking with the Private Sector and Foreign

Governments– Land Swaps– Development of Plans and View of Each Property within its

Lifecycle– Charge Individual Program Offices for Square Feet of Office

Space Occupied


• List your agency’s Real Property Asset Management Best Practices (continued).

– Established a Central Agency Point of Contact with GSA and the Internal Field Organizations for Handling All Real Estate Related Transactions

– Established Agency Space Management Standards and Enforce Them Throughout the Agency

– Provide Requesting Offices with a Template to Prepare a Business Case that includes a Cost Benefit Analysis, Funding, and Space Requirements, for use in the Approval Process when Requesting Space


• List your agency’s Real Property Asset Management Best Practices (continued).

– Use of an Asset Management Team and Partnerships– Asset Priority Index Guidance– Capital Planning and Investment Guidance– Formal O&M Cost Estimating Methodology– Quarterly Scorecard and Corrective Action Reports for

Constructed Assets– Sustainment Cost Template for Constructed Assets– Investment Review Boards

STATES’ BEST PRACTICES

• List your state’s Real Property Asset Management Best Practices.

– All Space in State-Owned Buildings is Allocated Based on Space Management Standards

– All Facility Managers are Required to Provide an Annual Maintenance Assessment to the State for Review and Project Prioritization

– Disposition of Excess Property is Vetted Inter/Intra Governmentally Via the State Clearinghouse

– Surplus Determination is Made by the Board of Public Works, comprised of the Governor, Treasurer and Comptroller

– Establishment and Use of a Facilities Assessment Program, Space Management, and a Real Estate Services

STATES’ BEST PRACTICES

• List your state’s Real Property Asset Management Best Practices (continued).

– Adherence to Procurement Rules– Open Lines of Communication with All Agenci8es and Branches

of Government– Clearly Defined Lines of Authority and Responsibility

CORPORATE BEST PRACTICES

• List your corporate entity’s Real Property Asset Management Best Practices.

– National Property Management Task Force, which includes the Sharing of Best Practices

– National Operational Audit Program– National Emergency Preparedness Program– Company-wide Intranet Site– On-line Property Management Resource Center– Comprehensive Capital Management Program– Customer Service Process– Market Data Collection and Comparison Process– Operational Management Policies

FEDERAL AGENCIES’ LESS THAN OPTIMUM PRACTICES

• List your agency’s Real Property Asset Management Practices that are Less Than Optimum.

– Inability of Agency to Retain Proceeds from the Lease and/or Sale of Real Property Asset

– Federal Agencies are Required/Forced to Acquire Space in the Central Business Areas that are sometimes Less Desirable and More Costly Unless Certain Conditions are Met

– Different Life Cycle Management Practices– Less than Sophisticated Real Property Management Systems– Significant Backlog of Maintenance of some Infrastructure with High

Risk Consequences Due to Lack of Budget– Lack of Flexibility to Manage the Construction Budgetary Authority as

One Lump Sum Due to Line Item Restrictions– Less Than Optimum Frequency of Engineering Studies and Finance

Controls to Improve Data Integration

STATES’ LESS THAN OPTIMUM PRACTICES

• List your state’s Real Property Asset Management Practices that are Less Than Optimum.

– Capital Planning. There is a need to change the paradigm.– State-wide Maintenance Operations. There is a need for Legislative

Changes.– Procurement is Designed to Create a Fair and Level Playing Field for all

those that chose to participate. This, however, May Not Provide the Optimum Combination of Space, Cost and Location. These Processes Need to be Streamlined.

– There is No Recurring Facility Renewal Fund for Normal Painting/Recarpeting, etc. Life and Safety Priorities always Outweigh Renewal Projects.

– General Fund Agencies Do Not Pay Rent, therefore, they have No Incentive to Economize Space.

– Deferred Maintenance is in Excess of $100 Million.

FEDERAL AGENCIES’ SUGGESTIONS FOR LEGISLATIVE OR REGULATORY CHANGES

• Provide your Agency’s Suggestions for Legislative or Regulatory Changes that Would Eliminate the Impediments to Optimizing your Agency’s Real Property Asset Management Policies and Practices.

– Revision to the Property Act of 1949 that would Allow such Incentives as Outleasing and Retention of Proceeds for Other Real Property Needs

– Need to Provide an Incentive for Good Real Property Asset Management Behavior by Allowing Agencies to Retain the Proceeds from the Sale of Surplus Property

– Provide Flexibility with the Construction Budgetary Authority as opposed to the Individual Line Item Restrictions.

FEDERAL AGENCIES’ SUGGESTIONS FOR LEGISLATIVE OR REGULATORY CHANGES

(Continued)– Increased Focus on Allowing Fees and Proceeds from Sales to

Flow Back to the Project, such as, the Davis Legislation Without the Restriction that only 10% of the Gross Sales be Returned to the Agency. The Increased Percentages Could Be Tied to Performance.

– Changes in Legislation are Needed to Better Manage High-Risk Projects, such as, Authorizing Reprogramming Authority to Deal with Projects Based on Risk Assessment.

– Provide Legislative Authority for the Agencies’ to Retain Proceeds from the Lease of Land or the Sale of Natural Resources Produced on the Land.

– Exempt Reporting of Off-Site Removals to HUD under the McKinney Act based on the History of No Expressions of Interest from Homeless Providers.

STATES’ SUGGESTIONS FOR LEGISLATIVE OR REGULATORY CHANGES

• Please Provide your State’s Suggestions for Legislative or Regulatory Changes that Would Eliminate the Impediments to Optimizing your State’s Real Property Asset Management Policies and Practices.

– Real Property Should Be Managed As a Commercial Asset With Full Service Rent Allocation Per Agency Regardless of the Funding Sources.

– Formula Driven Funding is Required to Fund Deferred Maintenance.

– Establish a Centralized Maintenance and Utility Control.– Provide for State-wide Maintenance Operations.

Documents

FEDERAL REAL PROPERTY ASSET MANAGEMENT sponsored by THE