Disposing of Unneeded Federal Real Estate May 2011

Funding challenges Executive Order Space optimization Energy management and sustainability Metrics and benchmarks to evaluate performance and decision making Excess or underutilized real property 2

Executive Order EO directs executive agencies to develop and use Asset Management Plans to determine whether real property holdings are sufficient for or in excess of what is required to satisfactorily fulfill their operational missions. Plans must be made to dispose of the excess real property inventory. Proceeds from that disposition (if any) are to be returned to the general funds of the Treasury.

Funding challenges 4 YES! But we need to figure it out! And we will.

5 $3 billion by 2012 President ‘s June 2010, memo directed Federal agencies to reduce space in a cost conscious manner in order to save $3 billion by 2012 through: –disposing of unneeded Federal real estate, –increasing sales proceeds, –cutting operating costs –innovative workplace strategies and, –improving energy efficiency.

6 Additionally agencies shall immediately adopt a policy against expanding data centers beyond current levels develop plans to consolidate/significantly reduce data centers within 5 years take immediate steps to make better use of remaining real property assets eliminate lease arrangements that are not cost effective pursue consolidation within and across agencies in common asset types increase occupancy rates through innovative approaches identify offsetting reductions in inventory when new space is acquired align with and support the actions to measure and reduce resource use and greenhouse gas emissions in Federal facilities pursuant to Executive Order 13514

7 Disposing of Unneeded Federal Real Estate We need to look at the way we work differently and adopt policies to reflect that. It’s time for the Fed to get creative. Increase utilization by engaging a mobile workforce. Make technology work for our workforce. Space Optimization

“When I first saw this memo, I thought it was just about another way to save money.” 8 But then the pieces fell into place. It brings together so many of our priorities. It is a threshold into an exciting new future. This is so much more than saving money. It touches on so many issues: cutting costs are part of it, but only part it is about introducing a new workplace culture where mobility and collaboration are the norm it is about rethinking and redesigning the workplace its about being green and our green proving ground initiative it is about implementing new technologies it is about leadership at a time that requires creative solutions it is about developing new relationships with our Federal counterparts it is about introducing new strategies to getting work accomplished it is about overcoming resistance to change and, most of all its about increasing productivity for our workforce.

Does your real estate effectively support your mission requirements? –If so, how? If not, what are the issues? What innovative ideas are you doing to help you realize cost savings? What are you doing to emulate success stories and best practices? Can you pilot some of these best practices on one office or bureau? Setting the Stage 9

10 Our Approach to Analyzing Opportunities Operating $/SF Energy Use/SF Low Utilization (Employees/SF) Low Mission Impact Low Risk High Mission Impact High Risk Step 1: Identify buildings with poor performance and low mission impact/risk Step 2: Buildings are mapped to look for opportunities: Consolidation Improved work space efficiency Collocation

Impediments 11 Mission Skilled Staff Processes Guidance Resources: Facilities IT Infrastructure Funding Client Agency Disruption to operations (short term risks to mission) Aligning improvements/consolidation with agency’s long term strategy Inter Office/Bureau/agency cooperation Cultural resistance to change from staff Time required to involve stakeholders in schedule Technology required to support improvements/consolidations Budget Constraints Challenges

Case Example- GSA Headquarters Challenge –Administrator Johnson challenged the agency to combine all GSA operations into the GSA HQ building, representing a 160% increase in space utilization 4 locations, total of 6000 staff, 2600 seats Mobility Response –GSA piloted several concepts to try to find the correct mix of productivity and office utilization Expected Results –The GSA HQ building is being renovated to accommodate an increase in capacity and a new way of working –800 GSA staff are residing in the building during the phased renovation to reduce transition costs of swing space 12

Case Example - FAA The Challenge –Consolidate operational air traffic advisory services provided by 58 Automated Flight Service Stations (AFSSs) The Response –Developed plans to discontinue operations at 42 AFSS locations, many housed in leased buildings at airports The Results –FAA reduced AFSS leased space from 515,766 rsf to 115,000 rsf with estimated annual savings of $3,489,935 13

Short term opportunities –What can be disposed of immediately? –What needs to be done to get the properties on your FRPP excess list to be disposed or demolished? –Expiring leases Opportunities 14

XXX Excess Facilities by GSF – Data Selection: - using Organization is XXX, Exclusions: -“Land” property type -“Service” (other than buildings) - “Storage” (other than buildings) property use 15

Number of Facility Leases by Lease Expiration Year 16

Agency Space trends 17 Historic Data based on assignable RSF - Active buildings, –Differs from FRPP, which includes GSF(not RSF) for Active and Excess. –Differs from Budget Figures, which are billable RSF only.

Average Energy Use per XXX Region 18

Operating Costs of XXX Occupied Owned Space 19

Longer term opportunities –Back office functions in high value real estate –Geography opportunities –Technology opportunities –Expiring lease opportunities –Leveraging mobile workplaces –Are there interagency opportunities? Opportunities (continued) 20

XXX Low Utilization Properties in High Value Markets

22 Geography of Portfolio

Mobility and Space Utilization 23

Space per person measure as the key performance metric Private Sector Median is 193 USF/person vs. Government Benchmark of 190 USF/person – we need to begin thinking of people per workstation as we become mobile. More efficient design of space has reduced the typical workspace since the early 2000s from about 250 USF/person to around 190 USF/person – but the world is now my workplace! Alternative workspace strategies and wireless technology have increased associates per workspace, resulting in a reduction in operation and maintenance costs and an increase in workforce morale Alternative workspace arrangements have become crucial parts of many organization’s continuity of operations (COOP) strategies The President and Congress have strongly encouraged teleworking and federal agencies have responded with positive results – we’re headed beyond telework to mobility! Hoteling and Desk Sharing are emerging strategies to connect mobile workers to a permanent office - work is what you do not where you do it. Utilization Benchmarks & Strategies

Benchmarks vs. Federal Agency Guidelines *Benchmark figures are further discussed in GSA Workspace Utilization and Allocation Benchmark Report

CBRE “No-Fly Zone” Concept 26

Commitment to refine plans to meet Presidential Memo goals Civilian Property Realignment Hearings Expect OMB to issue targets Tools/benchmarks –Census –Resource List Next Steps 27