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GAO: Know when to hold 'em, know what you're holdin'

A U.S. House of Representatives subcommittee learned some interesting news from the Government Accountability Office recently. While it comes as no surprise to anyone that the federal government owns a lot of real estate around the country, it had to surprise some that the government really has no clear idea of what all it owns and what kind of condition it is in.

Maryland, for example, has been bidding on the new FBI headquarters. The agency has outgrown its current site and has dispersed personnel to a number of annexes. If everything goes as planned, those annexes will be cleared out when the new facility is complete.

If you were a developer, where would you go to find out about that property? Would you go to the General Services Administration, to the Department of Homeland Security or directly to the FBI? Once you found the property record, could you trust it to be accurate? In the private sector, there can be some sticky penalties for failing to disclose, say, asbestos in a building.

Well, the GAO discovered that the federal government has no central repository for information about its real estate portfolio. Several departments -- Veterans Affairs and Agriculture, for example -- manage their own real estate holdings. The GSA houses a database that is supposed to include up-to-date information about all of the federal government's properties. Apparently, some things are not shared.

GSA's database has other problems, too. GAO did a quick review of properties on the list and discovered that several were given high scores when they actually had problems with everything from mold to radioactivity. And, of course, asbestos.

It is time, the GAO says, to develop a cross-agency strategy to manage the multi-billion dollar real estate holdings of the federal government. Congress needs to map out a plan that will start with identifying the true scope of the problem and end with clear delegation of responsibilities and authority to achieve the strategy.

Source: Baltimore Business Journal, "GAO calls for better plan to manage, shed excess federal real estate," Daniel J. Sernovitz, April 26, 2013

Our Annapolis, Maryland, firm helps clients with real estate transactions like the ones referred to above. If you're interested in learning more, please visit the commercial real estate page of our website.

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