Even with decades of real estate solutions experience, when CoreCivic Properties took off in 2013, our full-service real estate group knew it had significant milestones to achieve before it could become one of the government’s top “go-to” real estate solutions providers. Today, we’re much closer to that goal.
In August, CoreCivic Properties acquired the 540,566-square foot Social Security Administration (SSA) office building in Baltimore, Maryland (SSA–Baltimore). Prior to that in July, the company acquired 12 government-leased properties across five states, with more than 100,000 combined square feet. These acquisitions expand the portfolio of government-leased properties by about 36 percent.
Seizing a truly unique opportunity
An essential part of SSA's Central Office operations, the SSA-Baltimore acquisition represents a crucial milestone for the company.
“The whole acquisition process has made a deep impression on sellers by establishing us as a reputable buyer,” said Erik Rasmussen, CoreCivic managing director of Strategic Development. “As a result, a number of other opportunities have already come our way.”
The facility was built to SSA specifications in 2014 under a 20-year lease that expires in January 2034. Because it's designed to be environmentally-friendly and cost-effective to operate, the building has attained both LEED Silver and Energy Star certifications. The location accommodates about 2,000 SSA employees and is the newest of several properties occupied by the SSA in Baltimore, further strengthening the durability of the lease.
According to Rasmussen, the SSA-Baltimore property presented a unique opportunity in the market, and for CoreCivic Properties. “The federal government has 8,000 leases around the country for properties of various sizes," he said. "Based on the size of the lease, SSA-Baltimore is ranked 18th out of 8,000, which makes it a truly rare asset.”
Additionally, the remaining 15-plus years on the current lease contribute to the overall stability of the agreement and place it in the top two percent of all federal government leases. The lease is not only one of the largest, but also has one of the longest remaining terms.
Rasmussen explained, “There aren’t many buildings this size in this market with the type of durability and stability we’re attracted to, which makes this an extremely big win for us.”
The Social Security Administration is the only Cabinet-level federal agency not based in Washington, D.C. The SSA-Baltimore building is strategically situated five miles from the SSA’s 1.4 million-square foot headquarters in Woodlawn.
A combination of rich amenities complements this highly-efficient building designed specifically for mission-critical functions that include onsite micro-fiche storage, administrative court offices for judges and their support staff reviewing and ruling on cases, and a training center.
The importance of a good fit
As impressive as it is, the SSA-Baltimore property is only part of this success story. The addition of 12 government-leased properties across five states, including nine SSA field offices, marks another substantial step toward cementing CoreCivic Properties as a reputable buyer.
The portfolio presented a significant growth opportunity, according to Rasmussen. “It’s a good fit for our strategic mission and makes good sense for us given that it aligns with our diversification strategy.”
Throughout its history, Rasmussen said the team has focused on developing two essential strengths: expertise in owning and managing real estate, and working with the government to meet its needs.
CoreCivic Executive Vice President of Real Estate and leader of the Properties line, Lucibeth Mayberry, applauded everyone involved. “We're excited to continue leveraging our extensive real estate management capabilities, further expanding the solutions we're able to provide to government,” she said.
The acquisition is a significant win-win for CoreCivic and the government agencies leasing the properties.
“The work that’s being done in these spaces is critical to individuals around the country,” explained Rasmussen. “We help facilitate those practices and the government gets cost-effective leased space without having to build their own facilities.”
As the landlord, CoreCivic is responsible for utilities, maintenance, property taxes and additional services such as janitorial and landscaping.
Currently, CoreCivic Properties owns or manages more than 17 million square feet across the country.