By Jeremy B. Becker, VP and Associate Director, Public Institutions, JLL Atlanta
The State of Georgia is an international business and transportation hub. We have a strong public sector and thriving pro-business climate hosting headquarters for 30 Fortune 1000 companies. We’re ranked a top state for doing business by CNBC and Area Development magazine.
How have we come so far? State statutes and sound economic development practices—from single-factor corporate tax apportionment legislation to one of the nation’s lowest debt-per-capita levels.
Georgia businesses will continue to grow and thrive if the state continues its favorable regulatory environment and manages its critical core assets wisely—from its transportation and infrastructure portfolios to its water assets. But the state can also take steps to ensure savings and manage and protect its core assets via less publicized avenues:
- As a rule of thumb, state governments’ real estate portfolio management costs rank just below state personnel costs. Collectively, U.S. states manage billions of square feet of property, at an expense of billions of dollars annually.
- The State of Georgia maintains a commercial real estate portfolio comprised of millions of square feet of property ranging from dormitories to crime research facilities.
- Georgia continues to lag other states in its real estate portfolio optimization strategies and sale of its surplus real estate assets.
In short, Georgia does not yet view oversight of its real estate portfolio as an exercise in asset management, but rather treats the cost of managing its real estate as a necessary cost of doing business. An alternate itemization to the state accounting model—breaking down by cost of real estate spend rather than by department spend—could help to uncover a holistic picture of the state’s real estate costs and a clear path toward savings.
Greater Atlanta’s commercial real estate market is on an upward trajectory. No matter who next occupies the governor’s mansion, it could be a prime time to explore a change to our state’s real estate portfolio management, weeding out non-performing real estate assets to cut public sector costs.
States like Tennessee are taking unique approaches to maximizing their real estate portfolios. As the economy slowly improves and states continue to vie for new investment and jobs, Georgia can continue its national leadership, demonstrating its business acumen by showing how it makes successful facility and expansion decisions.
For more information on Jeremy Becker, visit his LinkedIn profile.