JOTFOC_FBI_Albany_Lease_Extension_Redacted.pdf

FBI, LNY22918

Project # 6NY0554

U.S. General Services Administration GSA Region 2

Public Buildings Service, Leasing Division Northeast and Caribbean Region

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Project Number: 6NY0554 Lease Number: GS-02B-22918 Location: 200 McCarty Avenue, Latham, NY Agency Name: Federal Bureau of Investigation (FBI)

1. NATURE AND/OR DESCRIPTION OF ACTION BEING APPROVED.

The General Services Administration (GSA or the Government) currently leases 66,317 ABOASF / 98,184 Rentable Square Feet (RSF) of office space at 200 McCarthy Avenue, Albany, NY under Lease Number GS-02B-22918 for the Federal Bureau of Investigation (FBI). Approval is requested to negotiate an extension of the Lease with the Lessor for twelve (12) months firm without full and open competition. This will provide for continued and uninterrupted occupancy by the FBI at 200 McCarty Avenue until GSA’s new/replacing lease procurement is completed.

2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED TO MEET THE AGENCY’S

NEEDS (INCLUDING ESTIMATED VALUE).

The FBI has a continuing need for office space in Albany, New York after the current Lease expires on September 28, 2018. The current lease was constructed to meet all of the FBI’s requirements. Some of the agency’s unique property characteristics include:

The FBI has advised GSA that the existing office space satisfies their mission requirements.

GSA has begun a new/replacing lease action, but due to the time required to complete this process an extension of the current lease is necessary.

The annual rent currently being paid under the Lease is $1,834,120.90 ($18.68/RSF).

3. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION.

41 U.S.C. 3304(a)(1): Only one responsible source and no other supplies or services will satisfy agency requirements.

4. DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S UNIQUE QUALIFICATIONS OR

NATURE OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED.

The 200 McCarty Avenue location is 100% occupied by the FBI, and was constructed to meet the FBI’s requirements at the time of the procurement. It is in the best interest of the Government to remain at this location as there is a lack of potential lessors interested in providing the FBI’s specialized space for such a short term. In addition, award to other than the current Lessor would require relocation of the entire requirement which would not be possible prior to the expiration of the current lease, and would cause the Government to incur move and replication costs that could not be recovered through competition.

A Cost Benefit Analysis was completed and the estimated tenant improvement, relocation and telecommunication costs substantiate the fact that relocating to a new location would not result in a lower rental rate, thereby saving the government money and allowing it to recover its relocation costs. Because: (i) the existing space at 200 McCarty Avenue satisfies the FBI’s requirements, and (ii) the costs associated with a relocation to another site would be substantial and time consuming, the

Government would not be able to recover its costs through competition. A savings of $4,504,588.27

(excluding additional RWA funding for FBI security requirements) would be realized by extending the current lease.

5. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED FROM AS

MANY POTENTIAL SOURCES AS IS PRACTICABLE. – NA

Per the requirements of GSAR 570.402, the GSA Lease Contracting Officer placed an advertisement on FedBizOpps (FBO) on April 9, 2018 for 20 days. As of this date, no responses to the advertisement have been received.

DEMONSTRATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE

GOVERNMENT WILL BE FAIR AND REASONABLE.

In accordance with Federal Acquisition Regulation (FAR) 6.303-2(a) (7), the Contracting Officer determines by certifying this document that the anticipated cost to the Government of $25.50/RSF for a 12 month lease extension is fair and reasonable.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

On March 26, 2018, GSA conducted Market Research using Co-Star and identified the following locations (Exhibit “B” attached):

Address Source [EOI/CoStar, etc.]

Asking Full Service Rental Rate

Notes

8. OTHER FACTS SUPPORTING USE OF OTHER THAN FULL AND OPEN COMPETITION – N/A

9. LIST OF SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN INTEREST IN THE

ACQUISITION – N/A

10. STATEMENT OF ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE OR OVERCOME

ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION.

Consistent with the Competition in Contracting Act, a full and open competition is being undertaken and this short term lease extension is required to protect the Government’s occupancy while that project is progressing to completion.

11. CONTRACTING OFFICER CERTIFICATION.

By signature on this Justification for Other than Full and Open Competition, the Lease Contracting Officer certifies that the award of a lease extension for 66,317 ABOASF / 98,184 Rentable Square Feet (RSF) of office space at 200 McCarthy Avenue, Albany, NY is in the Government’s best interest and that this Justification is accurate and complete to the best of the Lease Contracting Officer’s knowledge and belief.

__________________________________________ Date_____________________

Concurred by:

________________________________________ Date_______________________

________________________________________ Date______________________

Approved by:

_______________________________________ Date_______________________

Reviewed for Legal Sufficiency:

_______________________________________ Date ________________________

Concurred by:

______________________________________ Date__________________________

U.S. General Services Administration Region 02

FBI – 200 McCarty Avenue, LNY22918 Exhibit “A”

Cost-benefit Analysis

Acquisition of 98,184 Rentable Square Feet (RSF) / 66,317 ABOASF

Twelve Month Firm Term Analysis

(Incumbent)

(Market Estimate – Class A)

Square Footage ABOASF / RSF ABOASF / RSF

Estimated per RSF rate for Annual

Rent

$37.75 / $25.50

$36.70 / $24.79

12 months Total rent $2,503,692.00 $2,433,981.36

Tenant Improvement Allowance

($51.14 per ABOASF /

$45.68/RSF

$0.00 $ 3,991,540,91

Cost of Furniture & systems move $0.00 $ 301,411

Cost of tele-data systems move $0.00 $ 281,317

Total 12 month cost / annual RSF rate (no escalations included) $2,503,692.00 $7,008,250.27 / $

Lease Savings $ $4,504,558.27

Notes:

High end Shell and Operating Cost from Negotiation Objectives for a Full-Service Lease:

$25.50/RSF.

Estimated rent from Co-Star for fully serviced, Class A space: $24.79/RSF.

TI Allowance of $3,991,540.91 amortized at 5% over firm term. Note: due to high level of security required the TI Allowance does not cover all of the costs. Additional funding via a RWA would also be required.

Obtained from the Succeeding Lease Decision Tool.

2 CoStar Office Statistics ©2018 CoStar Group, Inc.

Albany/Schenectady/Troy � Year-End 2017

Albany/Schenectady/Troy Office Market Year-End 2017 – Albany/Schenectady/Troy

Albany/Schenectady/Troy Office Market

©2018 CoStar Group, Inc. CoStar Office Statistics 3

Overview

Class-C projects reported a vacancy rate of 4.2% at the end of the fourth quarter 2017, 3.9% at the end of third quarter 2017, 4.1% at the end of the second quarter 2017, and 3.8% at the end of the first quarter 2017.

Largest Lease Signings The largest lease signings occurring in 2017 included: the

19,650-square-foot lease signed by Morgan Stanley at 1212 Troy Schenectady Rd in the E Outer Albany County market; the 10,500-square-foot deal signed by Advantage at 920 Albany Shaker Rd in the E Outer Albany County market; and the 9,900-square-foot lease signed by Hometown HealthCare Inc at 26 Corporate Dr in the Saratoga County market.

Sublease Vacancy The amount of vacant sublease space in the Albany/

Schenectady/Troy market decreased to 36,933 square feet by the end of the fourth quarter 2017, from 43,374 square feet at the end of the third quarter 2017. There was 46,740 square feet vacant at the end of the second quarter 2017 and 46,740 square feet at the end of the first quarter 2017.

Albany/Schenectady/Troy’s Class-A projects reported vacant sublease space of 0 square feet at the end of fourth quarter 2017, from the 0 square feet reported at the end of the third quarter 2017. There were 0 square feet of sublease space vacant at the end of the second quarter 2017, and 0 square feet at the end of the first quarter 2017.

Class-B projects reported vacant sublease space of 5,233 square feet at the end of the fourth quarter 2017, down from the 10,674 square feet reported at the end of the third quarter 2017. At the end of the second quarter 2017 there were 14,169 square feet, and at the end of the first quarter 2017 there were 14,169 square feet vacant.

Class-C projects reported decreased vacant sublease space from the third quarter 2017 to the fourth quarter 2017.

Sublease vacancy went from 32,700 square feet to 31,700 square feet during that time. There was 32,571 square feet at the end of the second quarter 2017, and 32,571 square feet at the end of the first quarter 2017.

Rental Rates The average quoted asking rental rate for available office space, all classes, was $15.67 per square foot per year at the end of the fourth quarter 2017 in the Albany/Schenectady/Troy market area. This represented a 5.8% increase in quoted rental rates from the end of the third quarter 2017, when rents were reported at $14.81 per square foot.

The average quoted rate within the Class-A sector was $24.79 at the end of the fourth quarter 2017, while Class-B rates stood at $15.62, and Class-C rates at $11.61. At the end of the third quarter 2017, Class-A rates were $23.16 per square foot, Class-B rates were $15.11, and Class-C rates were $11.52.

Deliveries and Construction During the fourth quarter 2017, three buildings total-ing 62,290 square feet were completed in the Albany/ Schenectady/Troy market area. This compares to one building totaling 30,800 square feet that were completed in the third quarter 2017, four buildings totaling 70,321 square feet com-pleted in the second quarter 2017, and nothing completed in the first quarter 2017.

There were 26,500 square feet of office space under con-struction at the end of the fourth quarter 2017.

Some of the notable 2017 deliveries include: Mohawk Harbor - Building 1, a 40,000-square-foot facility that delivered in fourth quarter 2017 and is now 0% occupied, and Albany Medical Center, a 37,821-square-foot building that delivered in second quarter 2017 and is now 100% occupied.

The largest projects underway at the end of fourth quar-ter 2017 were 724 State St, a 22,500-square-foot building with 100% of its space pre-leased, and 127 Dunning St, a 4,000-square-foot facility that is 100% pre-leased.

Inventory Total office inventory in the Albany/Schenectady/Troy market area amounted to 65,345,945 square feet in 4,049 buildings as of the end of the fourth quarter 2017. The Class-A office sector consisted of 6,461,701 square feet in 33 projects.

There were 1,735 Class-B buildings totaling 42,839,153 square feet, and the Class-C sector consisted of 16,045,091 square feet in 2,281 buildings. Within the Office market there were 85 owner-occupied buildings accounting for 3,357,942 square feet of office space.

Reports compiled by: Conor Rector, CoStar Research Manager

Vacancy Rates by Class 2007-2017

Source: CoStar Property®

Absorption & Deliveries U.S. Vacancy Comparison Past 10 Quarters Past 10 Quarters

Source: CoStar Property® Source: CoStar Property®

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2007 3q 2008 3q 2009 3q 2010 3q 2011 3q 2012 3q 2013 3q 2014 3q 2015 3q 2016 3q 2017 3q

V a ca n cy

R a te

A B C Total Market

0.16

0.48

0.34

0.20

0.51

0.11

0.06

0.12

(0.04)

0.04 0.00

0.40

0.00 0.00

0.10 0.14

0.00

0.07 0.03

0.06

(0.1)

0.0

0.1

0.2

0.3

0.4

0.5

0.6

2015 3q 2016 1q 2016 3q 2017 1q 2017 3q

M il li o n s

S F

Net Absorption Deliveries

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2015 3q 2016 1q 2016 3q 2017 1q 2017 3q

V a ca n cy

R a te

Albany/Schenectady/Troy United States

Exhibit "B"

MaryNowobilski Highlight

Address City Property Type Property Size Space Avail Rent/SF/Yr

Class A Office 300,000 SF 300,000 SF $9.00-$18.002-6 Autopark Dr Latham1

Class B Office 89,807 SF 89,807 SF $16.00100 A Broadway Albany2

Class B Flex/Light Distribution 977,750 SF 268,635 SF Withheld150 Broadway Menands3

Class A Office/Medical 150,000 SF 80,000 SF $30.00150 New Scotland Ave Albany4

Class B Office 82,925 SF 82,925 SF Withheld1251 New Scotland Rd Slingerlands5

Class A Office 150,000 SF 150,000 SF Withheld15-17 Plaza Dr Latham6

Class A Office 80,000 SF 80,000 SF Withheld16 Plaza Dr Latham7

Only properties with valid lat/lon display on map

Copyrighted report licensed to GSA Acquisition Management Branch / Region 2 - 754991.

3/26/2018

2-6 Autopark Dr Latham, NY 12110 - E Outer Albany County Submarket

Lease Availability Report

BUILDING

Type: Class A Office

Year Built: Proposed

RBA: 300,000 SF

Typical Floor: 150,000 SF

AVAILABILITY

Min Divisble: 2,000 SF Max Contig: 150,000 SF Total Available: 300,000 SF Asking Rent: $9.00 - 18.00/NNN

SPACES

Floor Use Type SF Avail Flr Contig Bldg Contig Rent Occupancy Term

P GRND Office New 2,000 - 150,000 150,000 150,000 $9.00 - 18.00/NNN 120 Days Negotiable CBRE - Andrew Mangini (518) 452-2700, Ann B. MacAffer, CCIM (518) 452-2700 X123

LEASING COMPANY

Company: CBRE

Contacts: Andrew Mangini (518) 452-2700, Ann B. MacAffer, CCIM (518) 452-2700 X123

TRANSPORTATION

Walk Score ®: Car-Dependent (21)

Transit Score ®: Minimal Transit (23)

Copyrighted report licensed to GSA Acquisition Management Branch / Region 2 - 754991.

100 A Broadway Albany, NY 12204 - E Outer Albany County Submarket

Lease Availability Report

BUILDING

Type: Class B Office

Tenancy: Single

Year Built: 1955

RBA: 89,807 SF

Floors: 1

Typical Floor: 89,807 SF

AVAILABILITY

Min Divisble: 20,000 SF Max Contig: 89,807 SF Total Available: 89,807 SF Asking Rent: $16.00/MG

EXPENSES PER SF

Taxes: $1.11 (2011)

SPACES

Floor Use Type SF Avail Flr Contig Bldg Contig Rent Occupancy Term

P 1st Office Relet 20,000 - 89,807 89,807 89,807 $16.00/MG Vacant 10 Yrs British American Development Corp. - Cori Corvino (518) 786-6000

LEASING COMPANY

Company: British American Development Corp.

Contacts: Samantha Looby (518) 786-6000, Cori Corvino (518) 786-6000

AMENITIES

Bus Line, Signage

TRANSPORTATION

Parking: 200 free Surface Spaces are available; Ratio of 2.52/1,000 SF

Airport: 19 minute drive to Albany International Airport

Walk Score ®: Somewhat Walkable (60)

Transit Score ®: Some Transit (42)

150 Broadway - Riverview Center Menands, NY 12204 - E Outer Albany County Submarket

Lease Availability Report

BUILDING

Type: Class B Flex

Subtype: Light Distribution

Tenancy: Multiple

Year Built: 1955

RBA: 977,750 SF

Floors: 11

Typical Floor: 88,886 SF

AVAILABILITY

Min Divisble: 1,005 SF Max Contig: 276,000 SF Total Available: 268,635 SF Asking Rent: $12.50/+UTIL

EXPENSES PER SF

Taxes: $0.67 (2016)

SPACES

Floor Suite Use Type SF Avail Flr Contig Bldg Contig Rent Occupancy Term

E 7th 700 Office Relet 92,000 92,000 276,000 $12.50/+UTIL Vacant 3 - 5 Yrs NAI Platform - Felton McLaughlin (518) 465-1400 X208

E 8th 800 Office Relet 92,000 92,000 276,000 $12.50/+UTIL Vacant 3 - 5 Yrs NAI Platform - Felton McLaughlin (518) 465-1400 X208

LEASING COMPANY

Company: NAI Platform

Contacts: Felton McLaughlin (518) 465-1400 X208

SALE

Last Sale: Sold on Dec 22, 2004 for $21,500,000 ($21.99/SF)

LOADING

Docks: 40 ext

POWER & UTILITIES

Power: 480a/220v 3p

FEATURES

Signage

150 Broadway - Riverview Center Menands, NY 12204 - E Outer Albany County Submarket

Lease Availability Report

LAND

Land Area: 24.80 AC

Zoning: B

PARCEL

012603-055-013-0001-003-000-0000, 012603-055-013-0001-009-000-0000

TRANSPORTATION

Parking: 1,100 Surface Spaces are available; 700 Covered Spaces are available; Ratio of 1.62/1,000 SF

Airport: 17 minute drive to Albany International Airport

Walk Score ®: Car-Dependent (42)

Transit Score ®: Some Transit (39)

KEY TENANTS

Riverview Center 86,700 SF Vicarious Visions Inc 44,330 SF

Office of Children & Family Services 43,062 SF New York Department of Correctional Services 27,048 SF

Office of Temporary and Disability Assistance 25,427 SF New York State Department Of Health 23,721 SF

150 New Scotland Ave Albany, NY 12208 - Greater Albany Submarket

Lease Availability Report

BUILDING

Type: Class A Office

Tenancy: Multiple

Year Built: 2005

RBA: 150,000 SF

Floors: 5

Typical Floor: 30,000 SF

AVAILABILITY

Min Divisble: 20,000 SF Max Contig: 80,000 SF Total Available: 80,000 SF Asking Rent: $30.00/MG

SPACES

Floor Use Type SF Avail Flr Contig Bldg Contig Rent Occupancy Term

P 2nd Off/Med Relet 20,000 20,000 80,000 $30.00/MG Vacant 5 Yrs Pyramid Brokerage Company - Peter Struzzi, SIOR (518) 489-9199 X11

E 3rd Off/Med Relet 30,000 30,000 80,000 $30.00/MG Vacant 5 Yrs Pyramid Brokerage Company - Peter Struzzi, SIOR (518) 489-9199 X11

E 4th Off/Med Relet 30,000 30,000 80,000 $30.00/MG Vacant 5 Yrs Pyramid Brokerage Company - Peter Struzzi, SIOR (518) 489-9199 X11

LEASING COMPANY

Company: Pyramid Brokerage Company

Contacts: Peter Struzzi, SIOR (518) 489-9199 X11

AMENITIES

24 Hour Availability, Bus Line, Controlled Access, Security System, Signage

TRANSPORTATION

Parking: 606 free Surface Spaces are available; 200 free Covered Spaces are available; Ratio of 5.37/1,000 SF

Airport: 25 minute drive to Albany International Airport

Walk Score ®: Somewhat Walkable (66)

Transit Score ®: Some Transit (48)

150 New Scotland Ave Albany, NY 12208 - Greater Albany Submarket

Lease Availability Report

KEY TENANTS

Center For Medical Science, Inc. 2,400 SF

1251 New Scotland Rd Slingerlands, NY 12159 - W Outer Albany County Submarket

Lease Availability Report

BUILDING

Type: Class B Office

Tenancy: Multiple

Year Built: 1968

RBA: 82,925 SF

Floors: 3

Typical Floor: 27,300 SF

AVAILABILITY

Min Divisble: 24,491 SF Max Contig: 82,925 SF Total Available: 82,925 SF Asking Rent: Withheld

EXPENSES PER SF

Taxes: $0.63 (2012)

SPACES

Floor Use Type SF Avail Flr Contig Bldg Contig Rent Occupancy Term

P BSMT Off/Med Relet 24,491 24,491 82,925 Withheld Vacant Negotiable Picotte Companies - Tim Mcguire (518) 465-4747

E 1st Off/Med Relet 32,446 32,446 82,925 Withheld Vacant Negotiable Picotte Companies - Tim Mcguire (518) 465-4747

E 2nd Off/Med Relet 25,988 25,988 82,925 Withheld Vacant Negotiable Picotte Companies - Tim Mcguire (518) 465-4747

LEASING COMPANY

Company: Picotte Companies

Contacts: William Picotte (518) 465-4747, Tim Mcguire (518) 465-4747

AMENITIES

Air Conditioning, Conferencing Facility, Controlled Access, Security System, Signage

TRANSPORTATION

Parking: 300 free Surface Spaces are available; Ratio of 3.62/1,000 SF

Airport: 20 minute drive to Albany International Airport

Walk Score ®: Car-Dependent (28)

Transit Score ®: Some Transit (32)

15-17 Plaza Dr - Build-To-Suit Latham, NY 12110 - E Outer Albany County Submarket

Lease Availability Report

BUILDING

Type: Class A Office

Tenancy: Multiple

Year Built: Proposed

RBA: 150,000 SF

Floors: 5

Typical Floor: 50,000 SF

AVAILABILITY

Min Divisble: 5,000 SF Max Contig: 150,000 SF Total Available: 150,000 SF Asking Rent: Withheld

SPACES

Floor Use Type SF Avail Flr Contig Bldg Contig Rent Occupancy Term

E 1st Office New 5,000 - 30,000 30,000 150,000 Withheld TBD Negotiable First Columbia - Deborah Mikhitarian (518) 213-1000, Kristen Diesel

E 2nd Office New 5,000 - 30,000 30,000 150,000 Withheld TBD Negotiable First Columbia - Deborah Mikhitarian (518) 213-1000, Kristen Diesel

E 3rd Office New 5,000 - 30,000 30,000 150,000 Withheld TBD Negotiable First Columbia - Deborah Mikhitarian (518) 213-1000, Kristen Diesel

E 4th Office New 5,000 - 30,000 30,000 150,000 Withheld TBD Negotiable First Columbia - Deborah Mikhitarian (518) 213-1000, Kristen Diesel

E 5th Office New 5,000 - 30,000 30,000 150,000 Withheld TBD Negotiable First Columbia - Deborah Mikhitarian (518) 213-1000, Kristen Diesel

LEASING COMPANY

Company: First Columbia

Contacts: Deborah Mikhitarian (518) 213-1000, Kristen Diesel

TRANSPORTATION

Airport: 9 minute drive to Albany International Airport

Walk Score ®: Car-Dependent (21)

Transit Score ®: Minimal Transit (22)

16 Plaza Dr Latham, NY 12110 - E Outer Albany County Submarket

Lease Availability Report

BUILDING

Type: Class A Office

Tenancy: Multiple

Year Built: Proposed

RBA: 80,000 SF

Floors: 4

Typical Floor: 20,000 SF

AVAILABILITY

Min Divisble: 5,000 SF Max Contig: 80,000 SF Total Available: 80,000 SF Asking Rent: Withheld

EXPENSES PER SF

Taxes: $0.13 (2016)

SPACES

Floor Use Type SF Avail Flr Contig Bldg Contig Rent Occupancy Term

E 1st Office New 5,000 - 20,000 20,000 80,000 Withheld TBD 3 - 5 Yrs First Columbia - Deborah Mikhitarian (518) 213-1000, Kristen Diesel

E 2nd Office New 5,000 - 20,000 20,000 80,000 Withheld TBD 3 - 5 Yrs First Columbia - Deborah Mikhitarian (518) 213-1000, Kristen Diesel

E 3rd Office New 5,000 - 20,000 20,000 80,000 Withheld TBD 3 - 5 Yrs First Columbia - Deborah Mikhitarian (518) 213-1000, Kristen Diesel

E 4th Office New 5,000 - 20,000 20,000 80,000 Withheld TBD 3 - 5 Yrs First Columbia - Deborah Mikhitarian (518) 213-1000, Kristen Diesel

LEASING COMPANY

Company: First Columbia

Contacts: Deborah Mikhitarian (518) 213-1000, Kristen Diesel

TRANSPORTATION

Airport: 15 minute drive to Albany International Airport

Walk Score ®: Car-Dependent (17)

Transit Score ®: Minimal Transit (20)