There are more than 5,000 distinct owners of GSA-leased properties in the United States but the ten listed above stand apart because, together, their properties house 15% of the entire GSA lease inventory. (GSA, take note: these are your most important landlord customers.)
Some notes regarding this list:
- We have ranked owners by square footage and not rent or any other measure because square footage is the most unimpeachable metric available to us.
- Our ranking is based solely on GSA-leased properties, so it doesn’t include owners of buildings leased directly by agencies under their delegated, statutory or independent authority. However, we track those leases too and in some instances we’ve noted how the rankings might change if we took this analysis further.
- We have only tallied leases that have commenced. If a lease has been awarded but not yet commenced (as in a lease-construct project, for example) we haven’t counted that in this list.
- Determining “ownership” is tricky business. We have typically defined the owners as those operating partners who are the face of these properties–the people who ultimately manage the assets. However, we recognize that in most instances there are behind-the-scenes equity partners whose ownership stake is far larger than the operating partners’. We have not attempted to identify these equity partners in this list.
- This data changes all the time. The list should be accurate as of Spring 2013.
- If you think we’ve mis-counted your portfolio, email me or leave a comment below.
The Owners:
1. Government Properties Income Trust (NYSE:GOV)
Government Properties Income Trust is the undisputed leader in the government-leased property sector. The REIT owns GSA-leased properties in 31 U.S. states and the District of Columbia ranging in size from as small as 10,000 SF to more than a half million square feet. The figure in the table above represents just the GSA-leased space in GOV’s portfolio but, if we add other federal-leased properties as well as properties leased by various state agencies, that figure would grow to about 10 million square feet. Though GOV has yet to purchase any properties this year, the firm has consistently been among the most active buyers of government-leased buildings.
2. JBG Companies
JBG Companies is the most active property developer in the Washington, DC market, and Washington is home to the nation’s largest concentration of federal agencies. It’s an easy leap, therefore, to figure out how JBG could find itself in the #2 spot on our list. In addition to GSA, the firm also has a number of direct government leases in its portfolio, mostly with NIH. JBG also has more GSA-leased development projects going than any firm in the United States, by far. It is currently constructing build-to-suits for the National Institute for Allergy and Infectious Diseases (491,000 SF), the Social Security Administration (538,000 SF) and a massive renovation project for the Department of Health and Human Services (935,000 SF).
3. Vornado Realty Trust (NYSE: VNO)
Vornado Realty Trust is a $16.5 billion REIT with holdings primarily concentrated in New York and Washington, DC. Though Vornado’s government leases include significant exposure to DoD tenancy–much of which has been vacating due to BRAC–the investor still ranks among the nation’s largest owners of government-leased properties and it is likely that it always will as most of its properties are very near the Pentagon and directly across the Potomac River from the District of Columbia.
4. UrbanAmerica Advisors
UrbanAmerica Advisors is a partnership between UrbanAmerica, L.P. and Behringer-Harvard. The firm manages an investment portfolio of 14 properties that are primarily leased by GSA. Chief among these properties is the largest industrial lease in GSA’s portfolio–the 1.05 MSF logistics facility in Burlington, NJ that GSA’s Federal Acquisition Service uses to store and ship supplies through the eastern United States and around the world.
5. LCOR
LCOR makes this list based on ownership of just two projects–one of which is the 2.4 MSF headquarters of the U.S. Patent and Trademark Office, the largest GSA lease in the United States. The PTO complex is invested entirely by high net worth individuals. LCOR’s other asset is the new lease-construct project for the Nuclear Regulatory Commission (NRC). This 358,000 SF building, located in Montgomery County, Maryland, is currently for sale.
6. NGP V
NGP (formerly National Government Properties) is one of the earliest, serious portfolio investors in the government space. Over the years the firm has raised and invested five funds, all focused on government properties. This, NGP’s fifth fund (thus the “V” in their name), is comprised almost entirely of “single tenant” GSA-leased buildings. Nearly all buildings are less than 10 years old and all have more than five years of remaining lease term. It’s a remarkable portfolio and one that is unlikely to be replicated any time soon.
7. Saban Capital Group
Saban Capital Group is an L.A.-based private investment firm run by Haim Saban, a billionaire who made his fortune in the entertainment, media and communication industries. Saban Capital entered the government property investment space in a big way when it acquired the 21-property portfolio formerly owned by Record Realty Trust. The portfolio is comprised entirely of GSA-leased assets, coast to coast. The firm remains an active buyer of GSA-leased assets, having recently acquired a 240,000 SF FAA regional office building in the Chicago area.
8. Boston Properties (NYSE: BXP)
Boston Properties is a $16 billion REIT with substantial holdings in the Washington, DC market. With the exception of a very small GSA lease in Massachusetts, Boston Properties’ government holdings comprise 20 buildings in the District of Columbia and Northern Virginia. The firm’s holdings are diverse but it enjoys significant intelligence community occupancy including the CIA, the Director of National Intelligence and the Defense Intelligence Agency. It also controls Virginia 95 business park, which is fortuitously situated just to the south of the new National Geospatial-Intelligence Agency headquarters in Springfield, Virginia.
9. Space Center, Inc.
Space Center is a nationwide industrial developer and provider of third-party logistics. It also happens to be one of the nation’s leaders in subsurface industrial development. Yes, you read that right. Space Center provides underground records storage in facilities carved from underground limestone formations in the Kansas City suburbs. The naturally cool, humidity-controlled environment is perfectly suited to archival storage for agencies such as the National Archives and Records Administration, IRS and the Social Security Administration.
10. HPI Group
HPI Group is a Charlotte-based real estate investor that manages investments for high net worth individuals. The firm has been purchasing government leased assets since 1993 and has amassed a portfolio of 16 properties, nearly all of which are 100% leased by federal agencies. Among these is 1301 S. Young Street, a 388,000 SF building in downtown Dallas occupied by HHS and SSA regional offices.
Honorable Mentions:
Brookfield Office Properties (NYSE: BPO)
Had we included non-GSA federal leases in our rankings, Brookfield would have earned a spot just beneath NGP. The firm has substantial GSA lease holdings but some of its largest leases are direct contracts with TSA, SEC, the Pension Benefit Guaranty Corporation and the Smithsonian Institution.
Peterson Companies
The Peterson Companies are a Fairfax, Virginia-based developer with holdings concentrated in the Washington, DC suburbs. Peterson holds just two GSA leases (one of which is a FBI field office build-to-suit). However, Peterson has also constructed substantial facilities leased directly to intelligence agencies. Near Dulles Airport Peterson has completed more than 800,000 SF in a new–and growing–campus for the CIA. In McLean, Virginia the firm, in partnership with MetLife, built an 840,000 SF facility for the National Counterterrorism Center, a post-9/11 fusion center housing elements of the CIA, FBI and DoD.
Corporate Office Properties Trust “COPT” (NYSE: OFC)
Corporate Office Properties Trust owns National Business Park near Fort Meade, the Maryland headquarters of the National Security Agency (NSA). Serving the rapid growth of the NSA, COPT’s business plan evolved to focus substantially on leasing to federal security agencies and their private-sector contractors. COPT now owns facilities near most of the major U.S. intelligence agencies and often leases space to those agencies, usually on a direct basis.