OFOC Chicago NW IL Renewal 2IL0411_Redacted.pdf

GENERAL SERVICES ADMINISTRATION

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LEASE NUMBER GS-05B-17120

PROJECT NUMBER 2IL0411

4849 N. MILWAUKEE AVE.

CHICAGO, IL 60630-2199

This request for approval is submitted in accordance with FAR 6.304(2) and GSAM 570.401 Lease Renewal.

1. NATURE AND/OR DESCRIPTION OF ACTION BEING APPROVED

The General Services Administration currently leases 12,171 rentable square feet (RSF) / 10,630 ABOA square feet of office space at 4849 N. Milwaukee Ave., Chicago, IL 60630- 2199, under lease number GS-05B-17120 for the . The current lease expires 06/06/2025. Approval is being requested to exercise the renewal option to enable continued occupancy at this leased location.

In order to comply with the PBS Commissioner’s initiative to save taxpayer dollars through rental savings we have been prioritizing our procurements based on the overall value of the contract and the potential for rental savings. In situations where the space currently occupied has been confirmed by the GSA Property Manager to be capable of meeting the government's continued needs and the agency’s continued mission need Region 5 decided to incorporate five year unevaluated renewal options into some leases. We now have determined, following the procedures described in 570.401 that exercising this renewal option is in the best interest of the government. Moving actions forward through renewals will allow the region to focus on deals with higher financial impact, realign our expiring workload in a phased manner and realize the organization's goal of longer term strategic planning.

At this time, we have also not received long term requirements from the agency but expect to receive them early in this renewal period so a long term housing solution can be completed by the expiration of this renewal. A lease renewal would also allow the government to be housed at a pre negotiated fair market rate while accommodating the tenant agency for the next five (5) years. The has a continuing need to maintain their operations at this location. The agency requires the space at this current location for the duration of the renewal period to give them time to complete their long term requirements.

2. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED TO MEET THE

AGENCY'S NEEDS (INCLUDING ESTIMATED VALUE).

The is currently located at 4849 N. Milwaukee Ave., Chicago, IL, under lease number GS-05B-17120 in 12,171 rentable square feet (RSF) / 10,630 ABOA of office space. This 20 year, 10 year firm term lease is due to expire on June 6, 2025. In order to meet the agency’s ongoing mission, a renewal option was incorporated into the lease on August 16, 2024. GSA in Region 5 has been faced with agency delays in providing requirements for long term procurements for years creating delays in our ability to address agencies longer term space needs in a timely manner. In addition, the high number of leases expiring in the next 5 years has required Region 5 to use planned renewals of lower value contracts to allow resources to focus more on the larger, higher value contracts where the Government has more financial exposure.

Exercising such a renewal of this lease for 5 years commencing on 06/07/2025 will be per rentable square foot, resulting in a total cost of for the 5 year renewal.

3. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING OTHER THAN FULL

AND OPEN COMPETITION.

41 U.S.C. 253 (c) (1)

4. DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S UNIQUE

QUALIFICATIONS OR NATURE OF THE ACQUISITION REQUIRES THE USE OF THE

AUTHORITY CITED

Following the procedure described in 570.401 it was determined that it would be cost prohibitive and not in the best interest of the government to move the agency for the term of this renewal. The cost to replicate the tenant improvements and move the agency would be approximately per rentable square foot prior to considering the rental rate or operating costs.

The tenant improvement figure is derived from the General Services Administration’s tenant improvement allowance calculator and historical build out information for the

. The move costs for building to building move and telecommunications are derived from the General Services Administration’s Succeeding Lease Analysis Tool.

The current space is capable of meeting the agencies current mission needs for the term of this renewal and can be extended without the expenditure of replication cost. Expending the funds to replicate space to be used for only 5 years would be a waste of taxpayer dollars and is not in the best interest of the government. It is GSAs intention to finalize a long-term follow on procurement prior to or concurrent with the expiration of this proposed renewal term.

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

FROM AS MANY POTENTIAL SOURCES AS IS PRACTICABLE.

After discussion with the GSA Property Management office, it was confirmed that the location is acceptable to meet the housing needs of the agency for the renewal period. With that additional information it has been determined that exercising the renewal is in the best interest of the government and therefore no additional sources were contacted. The long term procurement to be conducted during the term of this renewal will consider all buildings that fall within the yet to be determined delineated area.

6. DEMONSTRATION BY THE CONTRACTING OFFICE THAT THE ANTICIPATED COST

TO THE GOVERNMENT WILL BE FAIR AND REASONABLE.

As we have not yet received long term requirements, we have inserted a 5 year, 3 year firm renewal. Using the current data, we have determined that the price negotiated when the option was incorporated into this lease is within the market range of the renewal.

CoStar market research indicates current market rates for this area to be between

. We anticipate receiving the long term requirements prior to expiration of the renewal period so that a better rate can be negotiated using full and open competition. Based on this information the negotiated rental rate for this renewal period should be found to be fair and reasonable.

The cost benefit analysis below reflects a savings of per RSF, to remain in the current location. Additionally, the government will save a total of in one time move costs for a building to building move and a telecommunications move. The market investigation and cost benefit analysis clearly show that it is advantageous for the Government to remain in the existing location for the renewal term even before factoring in move costs. Therefore, the Lease Contracting Officer finds the anticipated rate to be fair and reasonable.

Current Location Alternate Location Shell and Taxes Operating Costs Tenant Improvements Total per RSF

There are also one time move costs for telecommunications and the building to building move ( ).

The details of the above cost benefit analysis are based on the renewal rental rate under the Current Location column. As for the Alternate Location column, the market source used to obtain the shell and taxes was Reis Market Data and the average operating costs were obtained from the Bullseye report. The tenant improvements cost is sourced from the General Services Administration’s tenant improvement allowance calculator which has a feature that factors tenant improvement amortization based on the duration of the lease renewal term. The building to building move and telecommunications move costs are derived from the General Services’ Administration’s Succeeding Lease Analysis Tool.

7. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS.

A formal market survey was not conducted for this lease renewal, as moving the agency for the term of this renewal would be cost prohibitive and disruptive to the agency. A formal market survey will be conducted during the long term replacement procurement that will be completed during the renewal period. An ad was posted to SAM.gov on 7/12/24 to inform the public of the government’s intention to renew the lease. We have not received any written inquiries that have viable alternatives to the existing location.

8. OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND

OPEN COMPETITION.

In order to comply with the PBS Commissioner’s initiative to save taxpayer dollars through rental savings we have been prioritizing our procurements based on the overall value of the contract and the potential for rental savings. In situations where the space currently occupied has been confirmed by the GSA Property Manager to be capable of meeting the government's continued needs and agencies continued mission need Region 5 is renewing the lease based on the small financial risk to the government. Moving actions forward through renewals will allow the region to focus on deals with higher financial impact, realign our expiring workload in a phased manner and realize the organization's goal of longer term strategic planning.

9. LISTS 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.

Through continued focus on longer term strategic planning with our clients and negotiating longer lease terms GSA will be able to better manage our inventory and reduce the need for non-competitive lease renewals.

11. CONTRACTING OFFICER CERTIFICATION

I, the Lease Contracting Officer, certify that the above information is accurate and complete to the best of my knowledge.

Prepared by:

Carolyn McNealy Date Lease Contracting Officer

Reviewed and Concurred by:

Kimberly Gill Date Lease Contracting Officer

Kimberly Gill Date JSSA Leasing Branch Manager

Christopher Gronwold Date Lease Policy and Program Branch

Sheryl Wittstock, Director Date Real Estate Division

Robert Foltman Date Regional Counsel

Mike Wolff Date Regional Competition Advocate

Approved by:

Robert Green Date Regional Head of Contracting Activity