As champions and innovators of federal work experiences and environments, we are passionate about ensuring our federal colleagues have facilities that allow them to deliver mission critical services to the American people.
Our plan to deliver on this promise involves:
- Reducing leased real estate costs
- Developing work environments to meet today’s workplace requirements
- Divesting of underperforming assets no longer meeting today’s workplace requirements
- Reallocating resources to assets that generate higher returns for customers
This strategy replaces expiring leases to avoid increases in lease costs. Our plan will avoid approximately $4 billion in cost on leases becoming effective through Fiscal Year 2023.
This strategy helps us align workforce space needs with return to office policies and future of work demands. Unwanted or underutilized space is a liability to agencies looking to attract and retain talent, modernize their workflow, and strive for more sustainable practices. We have the expertise to help agencies find the right balance.
We are responsible for promoting effective use of federal real property assets, including disposing of property that is no longer mission-critical to federal agencies. The initial list represents a potential reduction of 3.5 million square feet and more than $1 billion in estimated cost avoidance over 10 years.
Core asset investments
Core Facilities financially sustain PBS’s Federal Buildings Fund and operations, as well as hold the highest long-term value to our customers and our portfolio. These assets contribute almost $1.2 billion in annual revenue and have a 10 year repair need of $6.6 billion. PBS will prioritize investments and seek lease consolidations into these critical long-term assets.
Our strategy
Since 2021, as directed by Office of Management and Budget (OMB) memos (M-21-25 [PDF] and M-23-15 [PDF]), agencies have been evaluating how work environments can be structured to enhance mission delivery while strengthening their organizations for the future — including evaluating the impacts of new workforce operational policies on agencies’ performance of their missions. While we do not make space decisions for our customer agencies, we leverage its expertise and experience to work closely with agencies to plan, and wherever possible, to help agencies downsize their real estate footprints.
We see an opportunity now more than ever to further optimize the footprint and save taxpayers money. Approximately half of the value of our leased portfolio is expiring within the next five years, and we can seize this opportunity to further reduce unneeded space — but only if we are able to make the necessary investments in our owned portfolio. As the Government Accountability Office noted in a recent report on building utilization, the largest impediment to improving building utilization has been lack of sufficient funding to allow for optimization to occur. To be successful, this transition will require upfront investments to improve building conditions in the assets that are long-term holds within our portfolio, and to move customer agencies out of the buildings that we intend to move towards disposition.
Our National Portfolio Plan guides our national asset management strategy. The plan seeks to modernize the federal portfolio by focusing reinvestment on core assets in order to:
The ultimate outcome of the plan will be a portfolio of fewer, but better buildings, modernized and optimized for federal agency missions.
Funding challenge
Progress can only be made if we receive full access to the Federal Buildings Fund (FBF) to reinvest in the federally owned portfolio to facilitate increased utilization, and agencies receive the necessary partner funding. There are significant opportunities across our portfolio where predictable, consistent, and adequate funding can be invested to drive real estate savings and reduce costs many times over.
More than a decade of persistent underfunding has resulted in billions of dollars in deferred maintenance needs that, if left unaddressed, will continue to compound. Resource constraints have also limited our ability to consolidate agencies and achieve better asset utilization. Despite our record of successfully reducing costs through consolidations, only 40 percent of the funding requested for the Consolidations Special Emphasis Program has been provided over the past 10 years. If we had received the full appropriation requested, we estimate that as many as 120 additional consolidation projects would have been completed, saving hundreds of millions of dollars for taxpayers. Additionally, chronic underfunding means that necessary repairs go unfunded in the year requested and must then be rolled over and resubmitted in subsequent budget cycles at a higher cost. For example, in FY 2024, 13 out of 17 Major Repairs and Alterations projects proposed are resubmittals; collectively, the total costs for these projects are now $300 million higher than the aggregate projects cost when submitted for prior fiscal years.
U.S. General Services Administration
