Kurt Stout

WASHINGTON, DC–Recently, pre-solicitation notices posted to the Federal Business Opportunities website (FBO) have been indicating GSA's desire to enter into longer lease contracts. FBO notices advertise GSA's requirements for upcoming procurements, including the length of lease term that the government is willing to execute. Therefore, these FBO notices are a good leading indicator of future leasing activity. We analyzed more than 2,000 of these pre-solicitation notices from 2011 to the present and found that the lease procurements underway since 2015 are poised to yield longer-term lease contracts as those procurements are completed and the leases commence.

Prior to 2015, the average total term sought in new GSA lease contracts averaged no more than 11.3 years; the non-cancelable (“firm”) term averaged no better than 6.9 years. Since then, total lease term has risen to 13.8 years and firm term has increased to 9.3 years. This overall improvement of 2.5 and 2.4 years, respectively, is a clear indication of GSA's desire for longer leases. The trend is welcome because long-term leases are the lifeblood of the federal property investment market.