Texas state government is a big tenant. It needs space in which to provide services, house administrative offices and store warehouse supplies. Statewide, the state leases 11.2 million sf in 1,219 leases in 321 cities for about $10 million a month. The square footage breaks down to 10 million sf in office space, 750,000 sf in warehouse and 427,000 sf classified as other. The state has leases totaling 3.9 million sf coming up in the next two years.
The changes are the result of a law passed by the Legislature to revamp the General Services Commission, the state agency that buys products and services for state agencies, which has been under sunset review. One change is that the agency is now the Texas building and procurement commission.
The idea behind the leasing changes is to reduce costs, find better space and establish better relationships with property owners. "We're looking for a better way to do what we've been doing at less cost to the state," Randy Riley, the agency's executive director, told the brokers Tuesday.
The state is turning to the private sector at a time in the business cycle when space is plentiful and becoming less expensive. Brokers, anxious to make deals, must weigh the benefits of having a steady client like the state against the risk of tying up too much of their resources in government process.
The state hopes to have a request for proposal ready for brokers in three months.
In the state capital, state government leases 3.2 million sf for a cost of $3.1 million per month. If that were all office space (it includes warehouse and other non-office properties), it would account for about 10% of the city's 29 million total sf of office space.
The scope of services that private-sector brokers would provide range from working with an agency to determine its space needs to executing lease agreements with property owners. The TBPC would have final review of a deal. Payments to brokers could be on a fee basis or paid by the lessor.
The state wants brokers to tell it how the process should work. Brokers can send comments to Michael Lacy, the agency's director of facilities leasing, at [email protected].
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