Building purchase will save taxpayers more than $409 million over 30 years
WASHINGTON – (RealEstateRama) – The U.S. General Services Administration today exercised the purchase option contained in its current lease for the U.S. Department of Transportation headquarters at 1200 New Jersey Ave SE in the Yards/Southeast Federal Center neighborhood. The purchase will put DOT’s headquarters in federally owned space, making it the final cabinet level agency to move its headquarters from leased space to owned space.
GSA is expected to close on the purchase in March 2020, more than 19 months ahead of schedule, saving taxpayers an additional $99.8 million in avoided rent costs. After closing on the purchase, GSA will own — and DOT headquarters will occupy — more than 1.9 million gross square feet (1.47 million rentable square feet), housing nearly 5,500 DOT personnel. The conversion of DOT’s headquarters from leased to owned space will also improve its functional efficiency and better support the agency’s mission and long-term personnel strategy.
“GSA is pleased to place DOT headquarters in federally owned space, with a location that meets DOT’s mission and saves taxpayers more than $409 million over 30 years,” said GSA Administrator Emily Murphy. “GSA is grateful for the collaboration from Secretary Chao and our partners at the Department of Transportation as we worked together to secure a prime location for DOT headquarters at a great value for taxpayers.”
“Our GSA team negotiated a tremendous sales price for the DOT headquarters building and we will save taxpayers an additional $99.8 million dollars in avoided rent costs by closing more than 19 months earlier than the lease expires,” said GSA’s Public Buildings Service Commissioner Dan Mathews. “We are proud to have successfully used the money appropriated from our partners in Congress for this project and to deliver on the mission of providing effective workplace solutions for federal agencies at the best value for the American taxpayer.”
GSA was able to achieve the negotiated purchase price of $760 million combined with an early lease termination effective March 2, 2020, which provides GSA an additional cost savings of approximately $99.8 million and brings the total net purchase/effective price to $660.2 million. The 30 year present value of this purchase is $409 million less than the cost of leasing, with an equivalent annual cost advantage of $20 million.
The mission of the U.S. General Services Administration is to deliver value and savings in real estate, acquisition, technology, and other mission-support services across government. One of GSA’s strategic goals is to save taxpayer money through better management of federal real estate.