Consolidated Statement of Work 2023 06 16.pdf

FY 2026 Fair Annual Rent Appraisal

Consolidated Statement of Work

Purpose

The purpose of the appraisal is to estimate the Fair Annual Rent (FAR) for the subject property based on specific characteristics that define the Subject of this appraisal. GSA will use this rate as the basis for rent for Federal tenants occupying space in the building.

The Subject Property:

The subject of the appraisal is a space: the size of the largest current tenant in the building; having the

Tenanted Floor R/U ratio as its efficiency or load factor; and the average quality throughout the building.

GSA Definition of Fair Annual Rent (FAR)

Fair Annual Rent (FAR) is the annual amount that may reasonably be expected for the right to the agreed use of real property, as established by competition in the open market. The FAR is a fully serviced rental rate; the annual rate includes the cost of all services except Security.

Assignment Conditions

● The appraiser must comply with USPAP and with the GSA Contractor Instructions (current versions) in performance of this appraisal assignment.

● The awarded contract cannot be sub-contracted since the contracted appraiser must be present for the inspections of all subject properties.

● At a minimum, at least one of the signatory appraisers must inspect the exterior of comparables.

● Results and analyses must conform to the guidance provided in the most current versions of the

GSA Contractor Instructions and Report Templates. The appraisal contractor must use the current version of the Contractors Tools.

● Training Requirements: First time contractors are required to attend the FY 2026 online training

“Understanding Fair Annual Rent Appraisal” prior to starting the assignment.

Assignment Framework

● The Building Space Classification Reports provide information for tenanted areas, common areas and unique floors.

● The Building Space Classification Reports are the only accepted source for subject property spatial data. Contract appraisers should disregard any size data from other sources.

● The appraised rate is the starting rent for a full-service ten-year term:

1. Fully serviced (gross) excluding Security.

2. Appraise the “as is” condition and use(s), “as renovated”, and/or “warm lit” shell condition. Regional appraisers establish which rate is needed for any building.

3. Concluded operating expenses must be supported and analyzed by market-derived data recognizing energy conservation characteristics of the subject. Cite expense comparables where possible.

4. Allocate the concluded full-service rent between operating rent (services) and unserviced

For detailed guidance please refer to the FAR Contractor Instructions Page 2 rent as defined in the Contractor Instructions.

● The appraised rate should reflect the market rate for average, finished areas within the subject building (or the market rate for comparable warehouse space for warehouse buildings).

o In some cases, distinct uses or characteristics of the building may require separate set of comparable leases, analyses, and conclusions. However, we may still require a single, blended rate. Please consult with the regional appraiser for further clarification.

o In such cases, each rate must have sufficient support to be credible and rates must be reconciled into a single blended rate.

● Calculate a levelized, unserviced rent for the entire 10-year term (GSA uses this for billing purposes), using the provided rent levelization worksheet, and applying your estimated annual escalation factors for the subsequent nine years.

● A separate parking analysis may be required, establishing a bulk-user (generally multiple-space) rate for the subject building. The appraised parking rates should be standard or un-reserved rate -

GSA does not require or charge reserved rates.

● The completed appraisal includes conclusions of market rent at specific points in time:

o Date of Inspection.

o Prospective (effective Fiscal Year) dates: 10/1/2023, 10/1/2024, and 10/1/2025.

The Appraisal Requires:

• No fewer than five executed and confirmed rent comparables; frequently additional comps are necessary to provide a credible analysis. You must provide a sufficient number of comparables to accurately reflect the market and support your conclusions. In smaller or less-active markets, the use of three comparable leases is acceptable.

o Exclude Federal government leases. If it is necessary to include state or local government leases, confirm that they are arm’s-length and are representative of the market.

o Include all the data required in the instructions for the rent comparable data sheet.

o Considering the high construction quality and finish of certain US Courthouses and federal buildings, construction quality of the selected comparables is of high importance. The search for similar quality construction and finish might require expanding of the search area beyond typical market area.

• The Rent Comparison Grid must be complete, as specified in the GSA Contractor Instructions. All adjustments must be explained and supported in the report.

• A determination of levelized rent. Escalation factors require market support, which may include any or all of the following (which must be explained in the report):

o Information from rent comparables o Local real estate surveys o Market participants such as buyers, sellers and brokers

• The completed report must contain all exhibits, maps and photos, signed certification(s) by the appraisers, limiting conditions to which the value is subject to.

• The addenda in the appraisal must include the following:

o A copy of both the summary and comments pages from the Space Classification Report.

o A copy of the Expense Component Breakout worksheet from the Contractor Tools Workbook.

o The appraiser’s qualifications and a copy of the appraiser’s current Certified General license effective in the state where the subject is located.

o A copy of the contract for this assignment.