Lease Cost Avoidance

PBS is focused on achieving taxpayer savings by avoiding increased lease cost through the timely replacement of expiring leases. The Lease Cost Avoidance Plan (LCAP) is GSA's plan to achieve approximately $4 billion in cost avoidance on leases becoming effective through Fiscal Year 2023. PBS's current leasing portfolio consists of more than 8,000 leases equating to more than 187 million rentable square feet of space. 66% percent of those leases expire within the next 5 years. This represents a huge level of real estate churn occurring across the nation and an opportunity to reduce real estate costs to agencies, allowing them to focus funding on mission priorities. The LCAP targets the 20% of GSA leases that accounts for roughly 80% of annual leasing costs. As the targeted leases are near expiration, we will seek to avoid costs by:

  • Establishing longer firm term leases;
  • Negotiating favorable rates;
  • Reducing Rentable Square Feet and Utilizing GSA's Total Workplace Program;
  • Backfilling vacant federal or leased space; and
  • Accelerating lease cycle time.

Lease Cost Avoidance compares a PBS executed lease to that of the status quo. For example, if an agency is currently in 10,000 RSF and through our efforts the space is reduced to 9,000 RSF the delta between the two is used as cost avoidance. The inverse is also true should an agency expand. We also compare the market rate to the one PBS agreed to with a lessor. In the graphic below, it would be space between the dotted red line and the solid red line:

Graph showing the trend of billed rentable SQFT from 2005-2020

PBS continues to realize successful lease cost avoidance through reduction of the lease footprint, achieving better pricing through longer terms, and negotiating rates below market. Below are recent examples where these efforts resulted in significant cost avoidance:

Success Stories:

Image of EPA Building in Denver

EPA - Denver, CO (PCO-08-DE16)

Replacing lease achieved $67 million in cost avoidance.

  • Lease Effective Date: 1/1/19
  • Reduced RSF from 248,849 to 176,000 representing a 29% reduction
  • Negotiated $39 rental rate 14% below the $46 authorized rate
  • Lease awarded with 15 yr firm and full term
Image of IRS Building in Kearneysville

IRS - Kearneysville, WV

Moved customer into Federal space achieving $28 million in cost avoidance

  • Occupancy Effective Date: 2/1/19
  • 122,000 rentable square feet lease moved into existing federal space utilizing consolidation funding
Image of NRC Building in Bethesda

NRC - Bethesda, MD (PMD-04-WA11)

Succeeding lease achieved $47 million in cost avoidance

  • Lease Effective Date: 12/15/18
  • Negotiated $25 rate which was 27% below the $34 authorized rate
  • Lease awarded with 15 year firm and full term

Last Reviewed: 2019-09-30