Colliers Wins Assignment to Market GSA Portfolio

A $118 million, 16-property office portfolio fully leased to federal agencies through the Government Services Administration is on the market and attracting interest from both U.S. and international buyers.

A $118 million, 16-property office portfolio fully leased to federal agencies through the Government Services Administration is on the market and attracting  interest from both U.S. and international buyers.

“This is getting a lot of attention and a lot of discussion,” Colin Cavill, a member of Colliers International GSAXCHANGE group that is marketing the 273,000-square-foot portfolio for West Second Street Associates, told Commercial Property Executive.

Cavill, managing director of Colliers International’s GSAXCHANGE, said the size of the portfolio is unusual in the GSA space.

“This is a very rare opportunity to pick up a portfolio that has geographic and tenant agency diversity in this space,” he added.

The properties are occupied by GSA tenants including the Social Security Administration, Internal Revenue Service, Immigration and Customs Enforcement, Department of Veterans Affairs and Customs and Border Protection. Seven of the properties are in Michigan; three in Ohio; two each in Florida and Texas and one each in Colorado and Minnesota. They were all build-to-suit and the oldest was built seven years ago. Two are still under construction but close to completion. The properties range in size from 6,000 to 40,000 square feet. The remaining average lease term is 10 years.

Cavill said the ongoing sequestration affecting the federal government budget does not affect these properties.

“Because these are long-term leases that have firm terms, there is not going to be any disruption of the rents,” he said.

Cavill said the GSA properties attract investors because they “provide a steady income stream and consistent yields.”

He told CPE that WSSA, a Flint, Mich.,-based developer and long-term property manager that specializes in GSA buildings, was selling the portfolio to redeploy the capital into other parts of its business.

But he added, “They’re not getting out of the GSA market.”

Cavill said the portfolio had been marketed for about two weeks, both inside and outside the U.S.  He expects bids to be submitted by May 21.

“We hope by early summer it will be closed,” he said.

The federal government is the largest single occupant in the U.S., leasing or owning more than 3 billion square feet of real estate. GSAXCHANGE, which is part of Colliers Government Solutions, is an investment sales and capital markets platform that deals solely with government-leased assets. Joining Cavill on the WSSA portfolio team are Bob Cottle and Darrin Kennedy.

“WSSA selected Colliers Government Solutions because of the deep federal-sector knowledge we provide, enabling us to better market the positive attributes of this portfolio,” Kurt Stout, executive vice president, Government Solutions at Colliers Internationl, said in a news release. “We are thrilled to have this opportunity to represent such a large portfolio of GSA properties, and look forward to expanding our presences in several strong markets.”

The Colliers Government Solutions platform consists of six services focused on government real estate: leasing, investment sales, finance, property management, appraisal and tax appeal. Members of the group work in teams to provide clients with solutions to deal with the often complex requirements of government-leased properties.