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Writer's pictureJeff@CEGspaces

The Benefits of a Government Tenant ๐Ÿ‘จโ€๐Ÿš€๐Ÿ‡บ๐Ÿ‡ธ

At CEG, we have experience in the public sector, including the General Services Administration (GSA), US Department of Agriculture (USDA), Minneapolis Public Schools (MPS), and the state of Minnesota. Working with the government is different than working with tenants in the private sector.


Astronaut flying a US flag on the roof of a brick school with windows.

We know how they work and understand the nuances needed to get their complex deals done. We get it and thatโ€™s a good thing for owners because the government can be a great tenant to land. Hereโ€™s why:

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1.ย ย ย ย ย  Governmental agencies take good care of the spaces they rent, and they typically rent a lot of square footage. Providing space for over one million workers, the GSA is the largest public real estate organization. They own or lease over 363 million square feet in over 2,200 communities, from small towns to big cities.

2.ย ย ย ย  Having a reliable tenant that sticks around is the goal of any property owner, and government tenants tend to do just that. Their leases are usually long-term and have high renewal rates, which means more stability for the property and for the owner.


Government building flying the US flag in its arch.

3.ย ย ย ย  The GSA and federal or state agencies have excellent tenant credit. You can count on the rent being paid each month and on time. Plus, leases are credit guaranteed. Moodyโ€™s, Fitch, and S&P place the government at the top of their rating systems, outperforming most companies. You never have to worry about bounced payments or late fees. They are dependable.

4.ย ย ย  Government tenants attract other businesses that want to be in close proximity. Public buildings are symbolic for our democracy, its accessibility to the people, and its commitment to community. Who wouldnโ€™t want to be around that?

5.ย ย ย ย  For investors, lenders are more likely to finance properties associated with government contracts, because they know the borrower will have a steady income stream from a reputable tenant.

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Conclusion

Having a broker with experience in the public sector is critical. You want someone who knows how to maneuver through the system, understands the governmental culture, and is aware of their requirements and negotiation process. The effort is worth it, as government agencies can be great tenants. The benefits of a government tenant is that they stick around, have excellent credit, and take care of the properties. Also, they attract additional tenants and provide confidence for potential financers.



Smiling Jeff Salzbrun

Jeff Salzbrun is the owner/broker of Commercial Equities Group (CEG). As a veteran-owned real estate brokerage, CEG has been involved in thousands of sale and lease transactions, ranging from single offices to 250,000+ square foot buildings. At CEG, we get your deal done. We know space, and we know the CRE business.


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