Starting in FY 2008, PBS will reduce its fee from 8% to 7% for the majority of leased space in which agencies are housed. The fee for unique space will be reduced from 6% to 5%. Although the drop in fees is 100 basis points, a lot of money in the aggregate, Herman Bulls, a member of Jones Lang LaSalle's Public Institutions Group here acknowledges, the decision by GSA will provide more of a psychological boost to the markets than any material benefit.
"Government agencies have voiced concern over the fees that they pay GSA," he tells GlobeSt.com. "This is one of the measures GSA is taking to reduce its costs." It is also a response by the agency to market pressures, he adds, which in general have been driving down the leasing operation costs.
"We don't think this change will have any impact on the Greater Washington metropolitan region except that we will have happier customers," a spokesperson for GSA tells GlobeSt.com "It's about being able to provide our customer agencies savings which translates to savings for the taxpayer."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
