What are the differences in leasing to the GSA Federal Government vs. the Private Sector

What are some of the major differences in a lease with the GSA for a Federal Government agency versus a private sector lease with Walgreens?
In Leasing Property - Asked by William S. - Mar 24, 2011
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Answer(s)

James B.
Broker/Agent
Oakbrook Terrace, IL

One key difference is the amount of landlord responsibility. While most GSA leases are full-service gross leases where the property owner takes responsibility for all maintenance and expenses including cleaning the GSA-occupied space, many of your larger national corporate tenants lease on a NNN basis and take full responsibility for all the aforementioned tasks/expenses. In a scenario where credit and net operating income are equal, a NNN property will yield less return, hence a higher sales price, than a similar gross-leased property.
Jim Blanchard
Inland Real Estate
jblanchard@inlandgroup.com

Mar 24, 2011
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Rob B.
Chandler, AZ

William.....
A word of caution with any government lease. Be sure to check for an early out (escape clause) in the standard, many page government lease you will necessarily have to use. It is not unusual to find such clauses that give a bit of insecurity to the Landlord. Good luck William.... Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855 Email: rob@capratecommercial.com

Mar 24, 2011
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Haydn P.
Broker/Agent
Chandler, AZ

Red Tape and lost revenue. The one we did, the government tied up the property for a year before they started paying rent. Create your own escape clause or get them to start paying rent 60 days after signing the Lease. Otherwise they will take forever in meetings for Space/Design Reviews, Construction Reviews, etc. before they even give permission to start the TIs.
Be prepared to spend 2 weeks filling out their required paper-work, and don't under estimate your costs; they won't help if yur construction costs escalate.

Mar 25, 2011
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William S.
Developer
Lake Forest, IL

The major difference is that a typical GSA standard form lease will be a gross fully serviced and the Walgreens is a NNN lease.

Mar 28, 2011
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William S.
Developer
Lake Forest, IL

The major difference is that a typical GSA standard form lease will be a gross fully serviced and the Walgreens is a NNN lease.

Mar 28, 2011
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