Advertisement
Economic Forecasts

For Rent, Cheap: Federal Office Space

Looking to raise revenue, federal building managers are reaching out to business tenants.

There’s a new player stepping into the already depressed commercial real estate market -- Uncle Sam.

Ordered by the Obama administration to find revenue to help cut the deficit, dozens of federal agencies are looking to be landlords and will start leasing space in unused parts of federal buildings across the country.

Advertisement - Article continues below

Federal building leasing has been going on for a long time, but not on this scale. Nearly 400 federal buildings already rent space to private businesses, including restaurants, banks, hair salons, newsstands, even local movie theaters and farmers’ markets. The White House’s goal is to have space available to lease to businesses in 1,000 federal buildings by 2013.

The General Services Administration, which manages more than 4,300 federal buildings, is poring over its real estate portfolio for leasing opportunities in federally run office parks, depots, storage warehouses and lab facilities, among others.

The military, too, is reviewing 370 buildings and storage places for potential private leasing deals, including at military facilities in Los Angeles, San Diego, Newport News, Va., St. Louis, Groton, Conn., and Philadelphia.

Federal leases are often bargains for renters, with the government more eager to find tenants for empty space than to get top dollar. Federally owned office space in Louisville, Ky., for instance, was rented last year for half of what was being charged tenants in nearby privately operated office buildings.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

Pending deals. A Department of Housing and Urban Development annex in Worcester, Mass., will soon be up for rent after 90 employees are relocated to Boston. A four-story Bureau of Land Management complex in Sioux Falls, S.D., that can house 200 employees also will soon be on the block.

More than 400,000 square feet of NASA office space is expected to be rented to business developers in Cape Canaveral, Fla., later this year. And 300,000 square feet of NASA office space in Houston will be designated for lease. Unused office space operated by the U.S. Mint in Denver and San Francisco is likely to be turned into rental properties, too.

The commercial real estate lobby is up in arms about added competition from the federal government, but there is little it can do. Though the government is renting, it’s not everywhere. Federal office renting will likely occur with little public notice, and Congress isn’t going to pick a fight with the administration over renting vacant office space. Actually, it’s more likely that lawmakers will aim to increase federal building space available for rent beyond the 1,000 buildings to 1,500 or so in the next decade. Congressional hearings on federal building leasing deals are planned this summer.

Advertisement

Most Popular

2020 Stock Market Holidays and Bond Market Holidays
Markets

2020 Stock Market Holidays and Bond Market Holidays

Is the market open today? Take a look at which holidays the stock markets and bond markets take off in 2020.
July 1, 2020
What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
Chiropractor Trying to Get Business the Wrong Way – Illegally
careers

Chiropractor Trying to Get Business the Wrong Way – Illegally

A new chiropractor’s fledgling business plan to attract patients may sound reasonable at first look, but it’s actually against the law, and the same p…
June 30, 2020

Recommended

13 Tax Breaks for Homeowners and Home Buyers
income tax

13 Tax Breaks for Homeowners and Home Buyers

Owning (or buying) a home is expensive. But at least there are some tax deductions, credits, and exclusions that can help you recoup some of those cos…
June 22, 2020
Tax Changes and Key Amounts for the 2020 Tax Year
tax law

Tax Changes and Key Amounts for the 2020 Tax Year

Americans are facing a long list of tax changes for the 2020 tax year...and it's never too early to start thinking about next year's return.
June 22, 2020
12 Things Every Home Buyer Should Do
real estate

12 Things Every Home Buyer Should Do

Buying a home may be one of the biggest purchases you will ever make.
June 12, 2020
11 Things Every Home Seller Should Do
real estate

11 Things Every Home Seller Should Do

As a home seller, your goal is to sell your property quickly for the most money possible.
June 12, 2020