Challenge
The Department of Commerce and the General Services Administration (GSA) identified approximately 36,000 square feet of unused and underutilized space in the Herbert C. Hoover Building located in Washington, DC. The space is divided over two locations: a 9,058 square foot law library on the first floor and 26,923 square feet of unfinished space in the basement. If properly utilized, these two spaces have the potential to be very valuable. Each space has a unique set of challenges, including: half of the law library is historically significant and cannot be altered and the basement space does not have appropriate access.
The GSA engaged Allegro as part of a consultant team tasked with solving this space utilization puzzle. The entire project consisted of exploring local market conditions, studying supply and potential demand for services, establishing cost to get the spaces market ready, providing cost and income projections, and making final recommendations for the “highest and best use” for the space. Allegro was charged with providing the final piece: recommendations for “highest and best use.”
Solution
Allegro took a multi-step approach to determine the highest and best use. First, Allegro toured the site and met with GSA and building representatives. Allegro then conducted an office and market analysis, focusing on the supply and demand needs of the surrounding area. As part of the analysis, they interviewed local brokers and real estate experts to help inform their findings. Allegro then created matrices in order to evaluate the factors that would determine the highest and best use for both spaces, incorporating the appraisal data and the projected cost of providing appropriate exterior access to the basement level space supplied by other members of the consultant team.
Ultimately, Allegro recommended a ranked range of use options for GSA to consider for the space. The highest ranked use option for the first floor space was office, and the highest ranked use option for the basement space was file storage.
