AUSPL Board Members Gary Phillips and Morgan Wolaver recently traveled to Washington, D.C. to meet with Mr. Tom Samra, USPS V.P. of Facilities, and Mr. Tom Russell, USPS Facilities National Manager of Real Estate Assets & Leasing. The nature of the meeting was an ongoing discussion on leasing terms but included avenues to work together on revenue streams relevant to leased facilities and cutting operating cost. During the meeting Messrs. Samra and Russell advised that the USPS is willing to accept 5-year terms with no termination clause in exchange for lower annual rents.
“We recognize that Lessors are demanding a premium for agreeing to a termination clause therefore we are willing to eliminate the clause if the rents reflect a lower fair market value”, Mr. Samra advised. Mr. Russell clarified that this may not apply to all properties as USPS Operations will require some POStPlan Facilities leases include termination clause. Mr. Russell emphasized that “While we are willing to accept leases with no termination clause, if Lessors hold out for rents above what is reasonable, then the USPS may be forced to close or move to another building near by”. The elimination of termination clause will help stabilize market values and should enable Lessors to seek better financing, whether refinancing or purchasing.