Feds look to outsource more office leasing work

Mark
Mark Brownlee
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Ottawa’s largest office tenant is looking to contract out more of its leasing services as it prepares to renew a pilot project started three and a half years ago.

(File photo)

The federal government’s initial lease brokerage services deal, awarded to CB Richard Ellis in 2010, was relatively modest. The firm only did work on deals of up to approximately 21,500 square feet and was limited only to office space on the Ottawa side of the National Capital Region.

That could be about to change, though. The government is preparing to issue a new request for proposals sometime in the late summer or early fall of this year, with a deal awarded sometime before the end of 2013.

Increasing the amount of work private firms do in trying to find office space for the thousands of public servants who work in the National Capital Region is something in which the federal government is actively interested.

The government is “searching for more opportunities to become more flexible and more efficient and that includes supplementing our services through outcasting,” said Jamie Becker, senior leasing advisor with Public Works, in a consultation session with industry members Friday.

The department is still considering how it plans to structure a future agreement for the work, said Mr. Becker, but expanding the deal to include Gatineau and raising the maximum square footage allowed are both on the table.

Public Works also wants to expand the amount of work the winning firm does in the retail category, such as properties the government has on Sparks Street.

Most of the deals during the previous contract were in the office (22) and advisory (eight) portions. None were in retail.

Exactly how lucrative the new deal will be is still unclear, however.

Public Works officials could not say exactly how much work the next deal will be worth, despite repeated requests from industry members at Tuesday’s meeting to give more details.

It will largely depend on what the government’s strategy is for using office space in the future, said Public Works officials, which is always subject to change.

They did not reveal the value of the last deal with CB Richard Ellis. It was above the $100,000 minimum, according to Mr. Becker, but below the maximum call-up value of $2.1 million.

The firm did roughly 300,000 square feet worth of deals during the previous contract, said Mr. Becker.

The winner of the previous contract declined to go into too many specifics about what the deal consisted of, other than to say it’s been fruitful.

“We’ve enjoyed the relationship,” said Greg Clark, vice president and managing director with CB Richard Ellis, in an interview. “They’ve been a pleasure to work with.”

He would like to see the government award the next deal for a longer period of time (his preference would be five years with a number of options). A higher maximum square footage per deal would also be useful, he said, since this would allow the vendor to build economies of scale.

Several brokerage firms appear to be interested. Avison Young, CB Richard Ellis, Colliers, Colonnade Real Estate Development Services, Cushman & Wakefield and SNC-Lavalin were among the firms present at Friday’s meeting.

Organizations: Richard Ellis, Public Works, Development Services SNC-Lavalin

Geographic location: National Capital Region, Ottawa, Gatineau Sparks Street

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