1. Disposing of Unneeded Federal Real Estate August 2011 SAME Luncheon John E.B. Smith

2. 2 $3 billion by 2012, $15B by 2015? President ‘s June 2010, memo ordered federal agencies to use less space in an attempt to save $3 billion by 2012 by: –disposing of unneeded Federal real estate, –increasing sales proceeds, –cutting operating costs –innovative workplace strategies and, –improving energy efficiency.

3. Civilian BRAC Proposals $15b by 2015; $19b by 2020 3 Several versions and ideas about how to organize and execute Any reform to real property asset management must address these central challenges: Incentivizing disposals by enabling agencies to realize the benefits of proceeds Addressing the upfront costs associated with disposals and consolidations Resolving competing stakeholder interests that can slow down or prevent good asset management decisions

4. 4 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

5. 5 GSA’s Three Pronged Approach We expect to use a three-pronged approach to meet the President’s goal: First, we must dispose of vacant or otherwise underused properties. Low lying fruit. Second, GSA will be asking agencies seeking new leases or new construction to reduce their square-footage requests and increase their reliance on mobility or other workplace strategies to reduce their space needs. Third we must begin eliminating lease arrangements that are not cost effective as one way to reduce unneeded space. We expect step two and three will provide additional space for repositioning.

6. 6 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

7. 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 7

8. Agency Space trends 8 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.

9. Number of Facility Leases by Lease Expiration Year 9

10. Operating Costs of XXX Occupied Owned Space 10 2010 Government-wide Operating Costs exceeded $33b!

11. Mobility and Space Utilization 11 This is a huge inefficiency.

12. GSA Central Office 12 Phased renovation 2010-2014 Administrator Johnson challenged PBS to fit all of the Washington GSA operations into the Headquarters facility at 1800 F St, NW, Washington D.C. Renovation will increase building size approximately 100K sq ft Finished product will have approximately 2600 seats GSA employee population in D.C. approximately 6000 personnel How can we develop the correct mix of productivity and office utilization? Industry leader visits Other government agencies, other governments Look inwardly for solutions –share your stories! Leverage solutions Space Optimization

13. 13 What if the Civilian BRAC doesn’t pass? We need to look at the way we work differently and adopt policies to reflect that anyway. It’s time for the Fed to get creative. Right now. Increase utilization by engaging a mobile workforce. Just do it! Make technology work for our workforce – its 2011! Space Optimization

14. Collaboration - Productivity 14 Dutch Boy Twist & Pour paint container quickly tripled sales of this Sherwin- Williams brand and was named one of the Ten Best Packages of the Decade. Nottingham-Spirk is known for its inventions and open innovation process have garnered more than 900+ worldwide commercialized patents. They moved into an old church without partitions to separate teams and the laundry detergent team collaborated with the paint can team and created the Twist and Pour paint container.

15. Jason Fried. 15 Builds web-based productivity tools New ways to conceptualize working and creating M&M’s distractions No talk Thursdays Steven Johnson. English Coffee House – brought the age of enlightenment Recommends we design our offices like the coffee shop – open, collaborative, an incubator for ideas. Collaborate and Share, Blend, & Create New Ideas Most of our offices need both concepts to operate – blending good ideas

16. Questions 16 What impact will this action have on the market? What impact will the current real estate market have on the process? What are some of the obstacles agencies are facing to meet the objectives in the President’s Memo to reduce unneeded real estate holdings? What assistance can GSA provide to agencies to assist them in meeting the goal? Don’t you need up front capital investments to accomplish many of the activities to reduce real property inventory? Can you cite some examples where agencies have reduced space using alternative work solutions/mobility? What about the Federal budget?