Sep 28, 2026 · 35 min · 10 segments
Easterly Government Properties’ Darrell Crate and CBRE’s Marcy Owens Test explain the unique complexities and opportunities when leasing space to the U.S. government. They explore government agencies’…
Darrell CrateGuest
Marcy Owens TestGuest.jpg?rev=e39e7f25c6dd4e6a8c9d23ae8e7fc8e6)
Spencer LevyHost.jpg?rev=e39e7f25c6dd4e6a8c9d23ae8e7fc8e6)
Since I live in the DC region, I remember the BRAC, otherwise known as the Base Realignment and Closure Act, which, as the name might suggest, realigned a lot of bases and closed a lot of bases, but put a lot of real estate on the market that might not have been there before.
And if the numbers I was reviewing are accurate, the, at its peak, the government had 25% more assets that they owned versus today that they now lease.
I mean, look, you've seen this and, um, one of the truths about government is that they adopt private sector practices about a generation after the private sector creates them.
I'm sure that's because they want to make sure they're time-tested and proven.
But the reality is corporations were selling off their headquarters in a leaseback structure, uh, over two decades ago, and the US government is catching on to this asset-light model.
And the way it works, quite simply, is let's imagine you're at the FDA and you're the new administrator.
You come in with the new administration, and Congress quickly cuts your budget for whatever reason.
What's the first thing you're gonna do when you go through? You're gonna be there l- imagine, in best cases, four years.
Well, the first thing you're gonna do is not repair the roof of your building, and you're gonna allocate those dollars, you know, toward the programmatic stuff that's important to your party, your people, uh, and the, the people who've put you in power.
And so at the end of the day, these roofs never get fixed, and accordingly, you know, a little leak on the roof turns into a gusher on the roof, turns into you need a new roof, and this is incredibly costly to the US government.
And as Marcy was talking about all these buildings that they're disposed of, many of them are condemned.
Even the GSA's own building in Washington, these are the folks who are the landlord for the US government, have had to move out of their building in order to... for about 30% of it that was shut down to be revamped.
We should do what we do well, which is maintain buildings and, that facilitate the mission, and they should do what they would do well, which is catch criminals and serve the American people.
Well, what's happening to the old buildings? Sometimes it can be a challenge to sell a building in a community.
Going back in, i- history, there's been a public policy viewpoint that ownership was less expensive than leasing.
Since I live in the DC region, I remember the BRAC, otherwise known as the Base Realignment and Closure Act, which, as the name might suggest, realigned a lot of bases and closed a lot of bases, but put a lot of real estate on the market that might not have been there before.
And if the numbers I was reviewing are accurate, the, at its peak, the government had 25% more assets that they owned versus today that they now lease.
I mean, look, you've seen this and, um, one of the truths about government is that they adopt private sector practices about a generation after the private sector creates them.
I'm sure that's because they want to make sure they're time-tested and proven.
But the reality is corporations were selling off their headquarters in a leaseback structure, uh, over two decades ago, and the US government is catching on to this asset-light model.
And the way it works, quite simply, is let's imagine you're at the FDA and you're the new administrator.
You come in with the new administration, and Congress quickly cuts your budget for whatever reason.
What's the first thing you're gonna do when you go through? You're gonna be there l- imagine, in best cases, four years.
Well, the first thing you're gonna do is not repair the roof of your building, and you're gonna allocate those dollars, you know, toward the programmatic stuff that's important to your party, your people, uh, and the, the people who've put you in power.
And so at the end of the day, these roofs never get fixed, and accordingly, you know, a little leak on the roof turns into a gusher on the roof, turns into you need a new roof, and this is incredibly costly to the US government.
And as Marcy was talking about all these buildings that they're disposed of, many of them are condemned.
Even the GSA's own building in Washington, these are the folks who are the landlord for the US government, have had to move out of their building in order to... for about 30% of it that was shut down to be revamped.
We should do what we do well, which is maintain buildings and, that facilitate the mission, and they should do what they would do well, which is catch criminals and serve the American people.
Well, what's happening to the old buildings? Sometimes it can be a challenge to sell a building in a community.
Going back in, i- history, there's been a public policy viewpoint that ownership was less expensive than leasing.
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