Following a May 2012 directive from the White House Office of Management and Budget, federal agencies are now prohibited from increasing their space while concurrently reducing the amount of space under lease. As a cost-saving measure, lawmakers are forcing agencies to trim their space as all real estate leases come to the House and Senate for approval.
To further reinforce the cost-cutting measures, new legislation that sets leasing rate caps is making its way through the House. HR 2612 has been proposed by Rep. Lou Barletta (R-Pennsylvania). The current lease caps are disparate for the D.C.-Maryland-Virginia region, providing D.C. landlords the optimum rate of $50 per square foot, followed by $39 per square foot in Virginia, and creating a nearly untenable rate of $35 per square foot in Maryland. This creates an uneven playing field across the region. All indications from GSA confirm an additional push for even lower square foot utilization while increasing the occupancy rate.
