GlobeSt.com EXCLUSIVE: Leasing Vehicle Revitalizes Unused Fed Assets

WASHINGTON, DC-Representatives from various agencies of the US Department of Defense, Department of Veterans Affairs and the financial services world gathered this week at a roundtable meeting at the District’s Fairmont Hotel to explore the government’s employment of Enhanced Use Leasing. Real Estate Media Inc. editor in chief Michael G. Desiato moderated the six-person panel, which was sponsored by Ernst & Young. Among the panelists were Jake Galllun of the Department of Veterans Affairs, Bob Penn of the Army Corps of Engineers Baltimore District and Alan King of Walter Reed Army Medical Center where EUL projects are currently under way. Bostonia Partners’ Anita Malino rounded out the panel, as did Jay Brown and Kim Burke of E&Y.

Enhanced-Use Leasing, as it was described during the session, is pretty much exactly what it sounds like. “It’s the government’s term for taking real estate–either land or facilities–that are underutilized and determining if there’s a value to putting it to use in the public or private sector to generate revenue for the government,” Brown explained. The vehicle was instituted via legislation passed in 1992.

The properties involved are underutilized but are not deemed as excess, and the developer or owner is bound by a ground-lease that is typically 50 years but not more than 75 years. The private firm develops or renovates the property with its own funds and is allowed to lease out the space to others at market rates. Brown and Burke act as advisors to the government, looking at real estate from the perspective of the builder or owner and then marketing projects for development.