Getting To Yes With The Country’s Largest Tenant NAIOP Maryland/DC Chapter The Public Sector Impact on Real Estate in 2010 February 24, 2010

Key Assumption Site meets GSA’s criteria for:  Location – delineated area  Transit access – the closer the better  Amenities – food, shopping  Security - setback  Land use - schedule

Government’s Objectives To achieve a high level of certainty that the selected site can deliver:  Time commitment  People involvement  Cost  Public profile The Government wants to procure the space once!

How Do You Win? Four key ingredients:  Development Team  Capital certainty  Schedule certainty  Property management

Quality of the Development Team Key members from the Government’s perspective:  Developer  Base building architect  Interiors architect  General contractor All need to meet minimum criteria set forth in SFO Past experience working together Two more key members the Government will not ask about:  Broker  Counsel

Certainty of Capital GSA needs to know that the deal will close Equity in today’s market  Sufficient funds to get to closing.  Plan on 35-40% equity at a minimum  You can’t afford to be wrong Debt in today’s market  60-65% is aggressive  50-55% is realistic For now, leverage is the enemy Your lease will not be contingent on financing

Certainty of Schedule Why this is critical to the Government  Expiring leases  Procurement of move-related items  Efficiency of consolidation Certainty of groundbreaking  Zoning  Site plan  Building plans Certainty of construction – team competence The Government holds the trump card – liquidated damages

Quality of Property Management Who will handle:  Move coordination  Commissioning  LEED Certification  Energy Star  Operations Input in design Input in Form 1217 Client satisfaction