Redacted_Sole Source - Approved 11-20-19.pdf

U.S. General Services Administration

GSA Region 9

Real Estate Acquisition Division

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER: Rexus #7CA3051 Agency Name:

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

The General Services Administration currently leases 7,972 ABOA/9,167 rentable square feet (RSF) of office space at 340 Golden Shore, Long Beach, CA 90802 under lease number GS-09B-02190 for the

. The current lease expires December 20, 2019. The current annual rental amount is $359,948.92 at a rate of $39.27/RSF. Approval is requested to negotiate a succeeding lease with the incumbent Lessor without full and open competition for continued occupancy at this leased location. The right to pursue a succeeding lease is detailed in GSAR 570.402: Succeeding Leases.

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

(INCLUDING ESTIMATED VALUE).

requested for a continuing need on August 4, 2017 for 9,167 rentable square feet of office and related space.

This requirement is for 7,972 ABOA/9,167 RSF of space for a 15-year term, 10 years firm to commence on December 21, 2019. The average estimated cost of this lease over the 15-year term is $ per rentable square feet per year for an estimated annual cost of $ and a total contract value of $ . The delineated area is North – 8th Street to Martin Luther King Jr Avenue to East 7th Street; South – The Pacific Ocean to Alamitos Avenue to E. Ocean Boulevard; East – Orange Avenue;

West – Cedar Avenue to W. 4th Street to W. Shoreline Drive to Golden Shore to the Pacific Ocean.

GSA posted an advertisement on FedBizOpps in the Central Business Area of Long Beach, CA on August 16, 2019. There were no Expressions of Interest received. As a result, the Government expanded the delineated area beyond the Central Business Area of Long Beach to obtain adequate competition. The advertisement with the expanded delineated area was posted on August 26, 2019.

There were no Expressions of Interest received for the expanded delineated area.

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. In accordance with FAR 6.302-1 and GSAR 570.402, it is determined that award to any other offeror would result in substantial duplication of costs to the Government that are not expected to be recovered through competition.

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

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

DocuSign Envelope ID: F216E84E-EA93-4AF3-A8DF-334B1959DB4D

It is in the best interest of the Government to remain at the current location. Award to other than the current Lessor would require relocation of the entire requirement and would cause to incur move and replication costs that would not be recovered through competition. Relocation costs are estimated to be $ . Additionally, this allows the Government to make use of existing tenant improvements, avoiding replication costs of $ . Special use space such as a etc., that would all have to be replicated if they were to move. A cost-benefit analysis was completed following the procedures set forth in GSAR 570.402-6 and is attached to this justification. The cost of relocating using the low cost quote exceeds the cost of remaining at 340 Golden Shore, Long Beach, CA. The total savings to the Government is $ .

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

MANY POTENTIAL SOURCES AS IS PRACTICABLE.

Per the requirements of GSAR 570.402, the GLS Broker with Cushman &Wakefield placed an advertisement in the Central Business Area of Long Beach on FedBizOpps (FBO) on August 16, 2019 for 7 days. Zero expressions of interests were identified. Due to the lack of competition, it is in the best interest of the Government to expand the delineated area beyond the Central Business Area of Long Beach. On August 26, 2019, an advertisement was posted on FBO with the expanded delineated area.

Other than the incumbent, zero expressions of interests were identified.

6. DEMONSTRATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE

GOVERNMENT WILL BE FAIR AND REASONABLE.

Recent market research conducted by Lease Contracting Officer, , in Long Beach, CA through CoSTAR showed the rental rate within the delineated area ranges from $ to $ per RSF. $ per RSF was identified as the lowest priced alternative to be used for the purpose of the cost-benefit analysis. The results of the market research are listed under Section 7 in Figure 2.

Therefore, the proposed rental rates for this succeeding lease of $36.68/RSF are within the current market range for this submarket and are deemed fair and reasonable by the GSA Lease Contracting Officer.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

GSAR 570.402-5 allows for negotiation with the incumbent Lessor when a cost-benefit analysis shows that the Government cannot expect to recover relocation and duplication costs through competition.

In November 2019, PBS conducted market research using CoStar and identified six potentially acceptable locations (five plus the incumbent) that might meet the agency’s needs within the delineated area. These locations are located within the delineated area and advertised that they do meet the minimum square footage and parking requirement. In addition, PBS placed an advertisement conforming to GSAR 570.402-2 on the Federal Business Opportunities Web site (fedbizopps.gov) on August 16, 2019. The incumbent Lessor’s expression of interest proposed rates as indicated in Figure 1. The incumbent Lessor was the interested party that provided the lowest cost quoted a rate of $ per RSF in its expression of interest.

See Figure 2 below for the results of the market research and FBO advertisement, including the incumbent.

Figure 1: Expression of Interest’s Proposed Rent Structure (in RSF) Year Shell Rental Rate Operating Rental Tenant Improvement Total Rental Rate

Rate Allowance 1-5 $ $ $ $ 6-10 $ $ $ $ 11-15 $ $ $

Figure 2: Market Research Comparables Address Source [EOI/CoStar, etc.] Asking Full Service

Rental Rate [incumbent] Expression of Interest $ *

230-236 E. 3rd St, Long Beach CoSTAR $ * 100 W. Broadway, Long Beach CoSTAR $ * 180 E. Ocean Blvd, Long Beach CoSTAR $ * 111 W. Ocean Blvd, Long Beach CoSTAR $ * 100 Oceangate St, Long Beach CoSTAR $ *

Listed rates that are not fully serviced, will be adjusted in the matrix to reflect the following:

* Includes operating rent of $ /RSF based on Lessor’s quote; $ /RSF of full tenant improvement allowance to the competition’s listed rate;

$ /RSF of tenant improvement allowance to the incumbent’s quoted rate; $ /RSF of BSAC allowance to the competition’s listed rate; and cost for reserved parking that is posted on the CoSTAR listing to the competition’s rate.

8. OTHER FACTS SUPPORTING USE OF OTHER THAN FULL AND OPEN COMPETITION.

There are no issues with past performance with the Lessor. There are no fire and life safety concerns with the building. In 2018, a tenant satisfaction survey was conducted and the building scored a favorable 95.35%.

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

ACQUISITION.

340 Golden Shore, Long Beach, CA (incumbent)

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

ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION.

In advance of an existing lease contract’s expiration, considerations will be given to allow for sufficient time to conduct a full and open procurement. The Government will consider the time and cost of moving from the existing location, and the time and cost to build out new space when deciding whether it is economically advantageous to stay at the existing building or to undergo a competitive action.

Additionally, consideration will be given to the customer agency’s mission and security requirements (if applicable) to include limiting any agency space requirements that may be deemed unduly restrictive and thus favor the incumbent. The Government will remain conscious of the effort to continuously encourage competition when practicable.

11. CONTRACTING OFFICER CERTIFICATION.

By signature on this Justification for Other than Full and Open Competition, the GSA Lease Contracting Officer certifies that the award of a succeeding lease of 9,167 RSF is in the Government’s best interest and that this Justification is accurate and complete to the best of the GSA Lease Contracting Officer’s knowledge and belief.

_ ______________________________ Date_____________________ , Lease Contracting Officer

12. PREPARER’S TECHNICAL CERTIFICATION.

I certify that the supporting data used to form the basis of this Justification is complete and accurate to the best of my knowledge and belief.

_____________________________ Date______________________ Lease Contracting Officer

CONCUR: _______________

rea Manager

Branch Chief rector

Real Estate Acquisition Division viewing Attorney

R9 Assistant Regional Counsel

APPROVED: ___________

, LAO

R9 Regional Competition Advocate

11/14/2019

11/14/2019

11/15/2019

11/18/2019

11/18/2019

11/19/2019

11/20/2019

Version: 3Q2019

Tab Rough Order of Magnitude (ROM) Formal CB Analysis Other Considerations

Intended Use

Enables a planning manager or lease project team member to run a quick ROM analysis to roughly determine whether pursuit of a succeeding lease is worthwhile. Calculates total contract costs for the current location and an alternate location.

A summary form to input all of the market information of the Lowest Priced Alternative (LPA) and estimates collected to complete a thorough cost benefit analysis in accordance with FAR 6.300 to support a JOTFOC should the LCO decide to go that route. Calculates total contract cost for the current location as well as the LPA.

A checklist of qualitative items that should be analyzed when we are considering a succeeding lease.

User Planning/ Project Manager and/or Lease Contracting Officer Lease Contracting Officer Planning Manager/ Lease Contracting Officer 1.) Populate green boxes in each section. This input will auto-generate values based on your selection.

1.) Populate green boxes in each section. This input will auto-generate summary values based on your inputs.

2.) Current Location and Alternate Location Market Data:

These are intended to be used if the lease resides in a major market. If the lease does not fall in a major market, click the "Override Market Rates" button to manually input a projected full service rate and a justification for why market rates are not used.

Note: Click The "Map It" link to help determine the appropriate market/submarket where applicable.

2.) Annual Shell Rent Rate: On each side of the sheet, input the applicable annual shell rentable rate per foot and manually account for step rents. There should be an annual shell rentable rate for each year to match the selected total term of the lease.

Annual Operating Rate: Enter the Year 1 Operating Rate. This rate will automatically populate to match the selected total term of the lease and escalate based on the entered operating escalation rate.

3.) Tenant Improvements Local Construction Index (LCI):

Please select the most appropriate LCI for the lease. This will normalize TI costs to the local market.

3.) Tenant Improvements: This amount should be inclusive of all TI costs including Security, BSAC, etc. Estimates should be project specific and as detailed as reasonably possible considering all information available at the time the estimates are completed. The estimates in the formal phase are expected to be more detailed and accurate and should not mirror those generated by the ROM CBA. In some cases, it may make sense to complete a formal IGE based on a detailed scope of work.

4.) Certain data factors are defaulted but can ultimately be changed based on reasonable market information.

4.) Rent Being Paid in Old Location: This is the total of the rent payments in the old location during the move process after rent has begun at the new location. Costs associated with poor planning are not to be included.

5.) For multi-tenant leases, complete a ROM tab for each individual agency and manually sum up the results.

5.) For multi-tenant leases, complete a Formal CB Analysis for each individual agency and manually sum up the results.

Result

Result will show the aggregate cost savings and percent associated with staying in place. The procurement decision is ultimately up to the LCO and this tool is not intended to override that authority in any way.

Result will show the aggregate cost savings associated with staying in place. There is no hurdle rate because it is the LCO's discretion to pursue a succeeding lease if there are substantial cost savings.

These values do not factor quantitatively into the analysis, but are important factors when exploring the viabilty of a succeeding lease decision.

Sharing

1.) Generate Customer Report: To share the analysis results with a customer, please click the "Generate Customer Report" button at the bottom of the worksheet. This will create a new, shareable workbook.

Note: In order to preserve the integrity of sensitive GSA data used by this tool, the new workbook will not include any formulas or background data. Any edits to the analysis will need to be made in the orginal workbook.

1.) Generate Customer Report: To share the analysis results with a customer, please click the "Generate Customer Report" button at the bottom of the worksheet. This will create a new, shareable workbook.

Note: In order to preserve the integrity of sensitive GSA data used by this tool, the new workbook will not include any formulas or background data. Any edits to the analysis will need to be made in the orginal workbook.

Instructions

Instructions

1.) Choose the appropriate response from the drop down menu for each qualitative item.

INTERNAL USE ONLY- Do not send outside of GSA. Use "Generate Customer Report" button at bottom of sheet if sharing with Customer.

Lease Number Street Address City State Current

Lease USF Current Lease RSF

Lease Effective Date

Lease Expiration Date

Lease Termination Rights Date

LCA02190 340 Golden Shore St LONG BEACH CA 7,972 9,167 12/21/2009 12/20/2019 12/20/2019

7,972 7,972

Agency Name Reis Market Los Angeles Asking Rate per RSF Effective Rate per RSF Custom TI Tier 2 Custom TI % Increase 20% Reis Submarket Long Beach $ $

Reis Submarket (Optional) -$ -$ Reis Market Los Angeles Asking Rate per RSF Effective Rate per RSF Reis Submarket (Optional) -$ -$ Reis Submarket Long Beach $ $ Reis Averages $ $ Reis Rate 29.86$

CBRE Market Los Angeles Asking Rate per RSF Effective Rate per RSF CBRE Market Los Angeles Asking Rate per RSF Effective Rate per RSF CBRE Submarket Downtown Long Beach $ $ CBRE Submarket Downtown Long Beach $ $ CBRE Submarket (Optional) -$ -$ CBRE Rate $ CBRE Submarket (Optional) -$ -$

$ CBRE Averages $ $ Market Average $

Local Construction Index (LCI)- State LCI- City LCI Adjustment to TI

Yes (Y) / No (N) Cost* Agency TI cost per foot (National Average) $

N $0 Enter Actual Cost ($) Carpet (broadloom) 0% N $0 $0 Carpet (tile) 0% N $0 $0

VCT 0% N $0 $0

N $0 $0 N $0 Total ROM TI Cost N $0 N $0 E. Move Costs Yes (Y) / No (N) Cost* N $0 Building to Building Furniture & Systems Move Y $ N $0 Floor to Floor Furniture & Systems Move N $0 N $0 Building to Building telephone systems move Y $ N $0

Enter Actual Cost ($) Enter Actual Costs ($) $ $0

$0 $0 $0 $0 $0

Amortization Rate (TI) Common Area Factor Common Area Factor

Lease Term (years) Estimated TI Buildout Costs Amount to be Amortized TI Amortization Term (years) Lump Sum TI Amount

Total of Rent Payments Over Term (Excluding TI) Total of TI Amortization Payments Over Term Lump Sum Portion of TI Total Move Cost Aggregate Total Project Cost

Anticipated Succeeding Lease Savings:

Lessor TI concession (Optional) (Optional)

TI work at existing location including buildout of a new polygraph room

Aggregate Total Project Cost

TI Amortization Term (years) Lump Sum TI Amount

Current Location - ROM

Total of Rent Payments Over Term (Excluding TI)

Lump Sum Portion of TI Total of TI Amortization Payments Over Term

Vinyl Wallcovering Space Planning Programing Government DID's

Known Unique TI Costs

Amount to be Amortized

1.15

Floor to Floor Furniture & Systems Move

Local Construction Index (LCI)- State LCI- City LCI Adjustment to TI

Rates & Data Factors Amortization Rate (TI)

Lease Term (years) Estimated TI Buildout Costs

Total ROM TI Cost for Current Location

New Phone system

Remove Carpet with System Furniture in place Vinyl Wall Base Paint

Tenant Improvements for Alternate Location

Anticipated Square Footage (ABOA SF)

Expected Full Service Asking Rate for Succeeding Lease

Tenant Improvements for Current Location

Anticipated Square Footage (ABOA SF)

*Rental payment calculations use Average Asking rates; Effective Rates are provided for information only.

Map It!

Map It!

(Optional BSAC) (Optional) (Optional) (Optional)

(Optional)

Rates & Data Factors

Total ROM Move Cost for Alternate Location

(Optional) (Optional)

1.15

Note: GSA's default position for all lease procurements is Full and Open Competition. Procurements using Other Than Full and Open Competition should be only pursued only when comparatively significant savings are shown, as outlined under GSAM 570.104 and FAR 6.302-1(a)(2)(ii)(A) ["Substantial duplication of cost to the Government that is not expected to be recovered through competition.”]. While there is no established standard or hurdle rate for the level of anticipated cost savings required, a minimum figure of 20% is a good indicator for project teams to use when working with client agencies in outlining preliminary procurement strategies. Project teams, in consultation with the LCO, should also take into consideration other factors such as mission requirements, location policy, anticipated competition, existing space conditions, past performance, and similar due diligence information before finalizing any lease procurement strategies.

Rough Order of Magnitude Cost Benefit Analysis

Current Location

AB Code

Current Lease Data

Current Location Alternate Location Based on Market Data Market Average based on REIS and CBRE Data

1.16

California

LOS ANGELES

(Optional)

Known Unique TI Costs

Known Unique Move or Personal Property Costs (Lump Sum)

California

LOS ANGELES

1.16

Alternate Location Based on Market Data - ROM

= User Input Required

Generate Customer Report

Project Number Agency Date Prepared City State

7CA3051 9/4/2019 Long Beach California Version: 3Q2019

Address 340 Golden Shore Address Square Footage (ABOA SF) 7,972 Square Footage (ABOA SF) 7,972 Common Area Factor 1.149899649 Common Area Factor 1.20

RSF 9,167 RSF 9,566

Total Term (Years) 15 Total Term (Years) 15 Total Contract Shell (from table) $ Total Contract Shell (from table) $ Operating Rate Escalation 2.50% Operating Rate Escalation 2.50% Total Contract Operating (from table) $ Total Contract Operating (from table) Total Contract Parking Cost $ Total Contract Parking Cost $ Total Rental Payments over Term Total Rental Payments over Term $

Annual Shell Rent Rate (pRSF) Annual Operating Rate (pRSF) Year Annual Shell Rent Rate (pRSF) Annual Operating Rate (pRSF)

Estimate Date 10/31/2019 Estimate Date 11/20/2017 Estimate Total $ Estimate Total $ Amount to be Amortized $ Amount to be Amortized Lump Sum TI Amount $ Lump Sum TI Amount $ Amortization Rate 8% Amortization Rate 8% Amortization Term 10 Amortization Term 10 Total of TI Amortization Payments $ Total of TI Amortization Payments $

Estimate Date 10/31/2019 Estimate Date 7/25/2019 Cost based on Estimate $ Cost based on Estimate $

Estimate Date Estimate Date 7/25/2019 Cost based on Estimate Cost based on Estimate $

Rent Being Paid in Old Location during Move $

Estimate Date Estimate Date 11/20/2017 Cost based on Estimate Cost based on Estimate $ Description of Other Costs $ Lessor provided a TI concession of $ . As a result, Description of Other Costs

BSAC - FSL 3

Total of Rent Payments Over Term Total of Rent Payments Over Term $ Total of TI Amortization Payments Over Term $

Total of TI Amortization Payments Over Term

Lump Sum Portion of TI $ Lump Sum Portion of TI $ Furniture Costs $ Furniture Costs $ Total Move Costs $ Total Move Costs $

Rent Being Paid in Old Location during Move $

Aggregate Total Project Cost of Current Location $

Aggregate Total Project Cost of Lowest Priced Alternative

Prepared By: Date: 11/6/2019

Move Costs

Formal Cost Benefit Analysis

Furniture CostsFurniture Costs

Current Location Lowest Priced Alternative

Move Costs

Tenant Improvements for Current Location Tenant Improvements for Lowest Priced Alternative

Annual Rent Input Table Annual Rent Input Table

INTERNAL USE ONLY- Do not send outside of GSA. Use "Generate Customer Report" button at bottom of sheet if sharing with Customer.

Aggregate Cost Savings associated with Staying in Place

Note: If the aggregate cost savings associated with staying in place is positive and substantial enough based on the LCO's discretion, this CBA is intended to support a JOTFOC based on GSAM 570.104 and FAR 6.302-1(a)(2)(ii)(A). (A) "Substantial duplication of cost to the Government that is not expected to be recovered through competition."

Summary - Current Location - OFFER/ Estimate Summary - Lowest Priced Alternative - OFFER/Estimate

Other Costs Other Costs

= User Input Required

Generate Customer Report

ABAAS Response Notes Is the current lease in compliance with the Architectural Barriers Act Accessibility Standard (ABAAS)? Yes

Security Response Notes Is the lease in full compliance with the most recent Security Standards consistent with the agency's facilities security level? If an FSL level 3 or 4 requirement, can the building accommodate an x-ray magnetometer, vehicle barrier, vehicle screening and security guard requirements?

Yes

Fire Response Notes Does the current building comply with the most recent edition of the building and fire code adopted by the jurisdiction in which the building is located? Yes

Does the current building comply with the applicable egress requirements in the National Fire Protection Association (NFPA) 101, Life Safety Code (current as of the award date of this lease)?

Yes

Did the IRIS Safety Assessment System identify any fire or life safety issues?

N/A

Seismic Safety Response Notes If the building is located is a seismic zone, has the Lessor provided a Seismic Certificate establishing that the offered building complies with the Seismic Standards or include a commitment to renovate the building to comply with the Seismic Standards prior to delivery of the space?

Yes

Environmental Response Notes Does the current building fall within the 100 year or 500 year flood plain?

Yes Blanket 8-step process completed.

Document issued by REQA.

Tenant Satisfaction Survey Response Notes In what year was the most recent Tenant Satisfaction Survey administered?

If this building was surveyed, please enter the overall satisfaction percentage for the most recent year surveyed.

Number of Respondents

Field Office Review Response Notes Has a response from the Field Office/Property Manager to the Building Manager Memo been reviewed and acted upon as needed?

General response of owner/lessor to building problems and complaints?

Any owner/management/janitorial contract changes that would cause you to have concerns regarding the current level of services?

General condition of current carpet?

Condition of any roof and leakage problems that have occurred during the term of the lease.

Is there evidence of any mold, water intrusion, asbestos, or related concerns?

Are there HVAC/System concerns and performance issues that have been raised or are present in the space, or does the HVAC system need upgrades or repairs?

Any lease enforcement issues, deficiencies or lease default actions, or is there a record of poor performance by the incumbent lessor?

Has all required work been completed and done satisfactorily?

Additional Comments

Agency Response Notes Have you received requirements? Yes Is the customer agency (facilities representative) overall satisfied at their current location?

Yes

Is the customer agency (local representative) overall satisfied at their current location?

Yes

Is the customer agency requesting a change in square footage requirements? No

Are there any location related issues that are of concern to stakeholders? No

Do you anticipate Congressional issues? No Additional Comments

Lessor Response Notes Has the ownership of the lease changed? Yes Unless a new replacement lease is proposed, is there language in the current lease that needs to be updated or revised, or is the lease contract less than 20 years old and in good shape?

Yes

Is the lessor responsive to issues in the current location? Yes Additional Comments

Lease Considerations

Past Performance Considerations

Other Considerations Contractual Updates

Environmental Considerations

Agency Considerations