District of Columbia leverages the power of data
The Department of General Services has entered a new era of powerful data-driven real estate management by using business intelligence tools to analyze the District of Columbia's entire real estate portfolio.
District of Columbia
District of Columbia’s DGS creates a data warehouse and leverages its data to transform real estate management.
More than 850 diverse properties across 8 city wards, comprising 35 million SF and a land area over 155 million SF.
Estimated portfolio value of $17 billion and a $1 billion annual real estate operating budget.
With a strong foundation of data, we are now able to support Mayor Bowser’s affordable housing and economic development initiatives more strategically than ever before.
In the nation’s capital, District of Columbia facilities comprise more than 35 million square feet of building space and more than 150 million square feet of land in over 850 educational, municipal and recreational facilities. When a new statute required the District’s Department of General Services (DGS) to provide detailed data about the city’s assets, DGS leadership saw an opportunity to reshape the organization into a 21st-century, data-driven asset manager.
To help bring the vision to life, DGS undertook a multifaceted, cooperative team initiative to restructure its operations with new roles and workflows. Through the new structure, DGS would be equipped to leverage its data to benefit District agencies and taxpayers.
As it considered solutions to the data challenge, DGS recognized the potential of data and analytics to fundamentally alter the management of the District’s real estate assets. Data-driven decision making would help DGS optimize the real estate portfolio and reduce waste while advancing the government’s mission.
With occupancy data at its fingertips, DGS could uncover opportunities to dispose of underutilized buildings, or redevelop facilities for more productive public or private uses. And, DGS would be able to better administer the District’s lease agreements with landlords, as well as it’s outlease agreements with tenants occupying District facilities.
DGS had a limited repository of portfolio data on hand that was used for budgeting purposes. For statutory compliance, it needed to ensure that the data accurately reflected portfolio assets, including square footage, occupancy and usage. And, it needed governance tools and processes to continuously maintain data quality.
Harnessing your data to support 21st-century asset management is a highly complex undertaking. You have to have a strong team with in-depth knowledge of government real estate, analytical skills and deep project management capabilities to cover all the details.
Through a competitive RFP, DGS chose JLL to help gather and leverage data to optimize portfolio management and real estate operations.
Concurrently, DGS began researching integrated workplace management systems (IWMS) to house the data repository. Ultimately, DGS implemented ARCHIBUS as the foundational platform in its technology ecosystem.
Starting with DGS’ spreadsheet of basic property data, the data research team prioritized core data points and began gathering data—including verifying addresses—for an initial set of 420 owned and leased buildings. However, the team first had to confer with various DGS divisions to locate data sets and reports, and determine which sources were the most accurate and current. To create a foundation for a real estate data warehouse, the team also needed to create naming conventions and data standards.
Tracking down critical details required painstaking reviews of construction documents and reports, along with onsite visits to hundreds of properties to verify usage, occupancy, room configurations, life safety inventory and more.
One essential task was to identify buildings with similar addresses and determine whether the site was a single campus or a group of individual parcels. The distinction was critical to avoid planning new construction on historic parcels where subdivision would be prohibited by statute.
Expanding beyond the initial subset of properties, the team also investigated complex parks and recreation facilities, as well as economic development projects. Some involved ground leases to third parties, which the team documented to ensure that the District was receiving the correct fee interest and lease payments.
One important finding: DGS had been under-reporting close to 40 million square feet of space—a number with significant budgetary implications.
Capturing outlease revenue
In a second project, the data team examined District properties “outleased” to such external parties as charter schools, restaurants and retailers. Collaborating with JLL’s lease administration experts, DGS created and migrated 232 lease abstracts to the ARCHIBUS platform to help the District more accurately administer its outleases.
The outlease reviews revealed that many tenants were not being billed, uncovering a need to reconcile the District’s financial records to generate accurate lease balances. In addition, DGS discovered opportunities to improve tenant communications and compliance with lease terms concerning maintenance abatements, insurance coverages, rent escalations and other issues.
With the foundation of ARCHIBUS and an enterprise data warehouse, DGS has entered a new era of powerful data-driven real estate management. For starters, it’s adopted new asset valuation and cost/benefit modeling tools to inform portfolio decisions. And, it’s using powerful business intelligence tools to analyze the District’s entire real estate portfolio.
As a result, DGS has identified numerous vacant and underperforming office, educational, fire and safety, warehouse and land assets, along with strategies for leasing, repurposing or disposing of these underutilized assets. Now DGS is exploring initiatives such as land banking assets that could be used for high-priority policy initiatives, such as the creation of more affordable housing.
With reliable portfolio data in place, DGS now is positioned to leverage its portfolio to support policy initiatives. Foremost among these is Mayor Muriel Bowser’s initiative to deliver 36,000 new housing units by 2025, including 12,000 affordable units, to help alleviate the constrained local housing market and preempt an anticipated housing shortage.
In a second initiative, Mayor Bowser’s administration seeks to leverage the District’s leasing power to spur economic development in underserved communities, particularly in Wards 7 and 8. Using portfolio data, DGS now can analyze the District’s assets as an owner and landlord. Identifying where government agencies are distributed throughout the District and uncovering underutilized property provides a crucial starting point for informing the District’s location strategy as a tenant. When it comes to agency leases and public-private partnerships, DGS can choose to signal to the market that location is important.
Operational budgeting and capital planning are now based on verified portfolio data, rather than approximations of portfolio assets. With data at its fingertips, DGS can more easily prioritize investments and build consensus about how agencies can best use their assets.
Also, DGS is adopting sophisticated modeling, planning and documentation tools to support dynamic portfolio management. In a pilot project, DGS is validating 7.5 million square feet—15%—of building space measurements and creating room-level CAD polylines and room numbering standards to upload into ARCHIBUS.
Financial management has improved in other areas, too. For the first time in its history, DGS has begun invoicing outlease tenants and tracking outlease revenue. It has created standard operating procedures for managing the District’s owned and leased assets, instilling confidence in its lease revenue forecasts, projected expenses, and compliance with lease and outlease agreements. Also critical, improvements in the outlease administration process have been instrumental in helping the District transition to the new GASB 87 lease accounting standard.
DGS now can accurately determine whether a particular tenant should be covering its utilities bills or paying rent escalations. These critical details represent a potential revenue impact of millions of dollars.
Looking ahead, DGS continues to invest in data gathering and governance as it continues to build out its data warehouse. It’s creating long-term plans for its major assets, using data to determine the best use of each property and adopt corresponding capital strategies. It plans to integrate more than 20 different applications into ARCHIBUS to create a holistic technology ecosystem. And, DGS is equipped to provide agency leaders with portfolio inventory and strategic facilities recommendations that can advance their missions.
For the District of Columbia and DGS, a statutory request for data became far more than just a matter of creating a database. Instead, the DGS leveraged the power of data to trigger real estate reinvention.