NFDA Corporate Member Spotlight: CBRE Government Investment Properties Practice

Brian Saal and Marc Rampulla are co-leaders of the CBRE Government Investment Properties (GIP) practice, specializing in the sale and financing of buildings leased by federal, state and municipal tenants. Based in CBRE’s Washington, D.C. office, the duo joined in August 2019, bringing with them more than 30 years of combined experience in the industry and an added offering to CBRE for investors seeking capital markets services for government-leased properties.

In this member spotlight, they discuss their unique skillset required to operate in our niche field, their history with NFDA and their current market outlook and post-pandemic implications. R

Tell us about your business – what are your primary responsibilities and areas of focus?

Both: Our practice is nationally focused on sales of assets with government tenancy. We work with our clients to evaluate assets for disposition, advise on strategies to maximize value, refinancing or capital raises and successfully execute our listings. Our group works closely with CBRE’s Federal Lessor Advisory Group (FLAG) and we have in-house government leasing experience as well, so our practice is extremely well-versed in the nuances of our investment sector. As part of the CBRE platform, we also collaborate and work closely with our local capital markets and research teams in different geographies throughout the country.

How did you get into this area of the industry?

Saal: My career started as a Capital Markets analyst, and after two years, an opportunity opened up in a government specialty group focused primarily on leasing. I have been focused ever since on this sector, going on 13 years now, and our current practice group is a progression of the government sales platform that started as part of my partnership with Marc.

Rampulla: My career started in research at Trammell Crow about 20 years ago. Shortly after starting the new role, an analyst position opened within the Capital Markets team and I transitioned out of research into capital markets and it has been my sole focus ever since. Working throughout the Mid-Atlantic, I’ve had the opportunity to work on many government capital markets transactions and expanded the government focus nationally, working with Brian.

How would you categorize the government sector of the CRE industry today?

Saal: It feels like this investment sector has been more of a focal point and growing rapidly in the last several years. We have seen so many investment groups grow and new entrants into the space pursue opportunities. The landscape and value proposition for this sector is definitely different than it was ten years ago. 

Rampulla: Government presence has always been a significant driver in CRE. Having worked through several cycles now, I have noticed the government niche has become more of a focus with each cycle as investors become risk averse and specialize even further to compete for capital. This dynamic is comparable to the data center, medical office or student housing specialties as well. As more sources of capital compete in the market, the sector has received more attention, dedication and focus from a wider audience. This is a result of the continued strength and resiliency demonstrated by government tenants despite the dot-com crash, Great Recession, and now, a pandemic. 


How has the market changed since the pandemic? What are your predictions for the years ahead?

Saal: The market has changed significantly overall throughout the pandemic, yet our sector has remained very steady. We always explore the correlation between the federal budget, leasing trends and the capital markets that affect our sector. Capital markets have now largely stabilized with a flight to quality and aversion to risk in the office sector, which has resulted in sustained demand for government assets. Also, the government still values the physical office environment for its employees and many of its specialized facilities require employees to be in-person for productive operations. Lastly, the government has recently, and very smartly, pursued longer firm term leases, particularly for their larger profile occupancies. All of these factors have kept the fundamentals of our investment sector generally steady and even supported additional growth. I would predict that we’ll continue to see a focused investor interest in government assets and continued opportunities for both buyers and sellers.

Rampulla: All markets have been significantly impacted since the pandemic and only time will tell what extent these changes will be permanent. The government capital markets sector is no different, but fortunately the changes have been positive. The space has witnessed an influx of capital as secure credit cash flows were not the only priority as investors became increasingly uncertain about the long-term need and use of private corporate real estate. As government tenants continued to use their space, pay their rent and already went through a significant footprint reduction, government tenants were not only a sound credit investment option, but also one of the only tenant bases to demonstrate a need for their space long-term. As a result, more capital has been chasing fewer deals and driving cap rates further down. Coupled with what appears to be a long-term low interest rate environment, we anticipate this trend to continue.

What do you find most valuable about your membership with NFDA?

Saal: The ability to connect with a diverse group of owners, investors, advisors and the GSA is extremely valuable. We’ve enjoyed participating in the annual conference in DC for many years in addition to several chapter meetings throughout the country. NFDA members are a smart, experienced and focused group, who are always busy with something interesting and it’s great to catch up, hear about their pursuits and get their market perspectives.

Rampulla: The connectivity and collaboration with such a broad group of professionals within the government sector is very impressive. Data and information unique to this space are not formally tracked using traditional methods, so it’s very common to be a resource for, or rely on the NFDA network, which has been very powerful.

If you can’t be at a NFDA meeting, where in DC would you rather be? 

Saal: Now that things are getting back to normal, definitely looking forward to more frequent trips to the ballpark to see the Nats and the Wharf for some seafood. Also, happy to host anyone for happy hour and cigars at Shelly’s Back Room in DC, one of our favorite spots.  

Rampulla: Fortunately, many of my hobbies are pandemic-friendly including hiking, fishing, cooking or enjoying a good bourbon with family and friends, but I am looking forward to traveling again for both business and pleasure. Most of the transactions and clients we work with are not in the Mid-Atlantic, so it will be great to connect in-person once again. 

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