Real Property Exchanges by the General Services Administration

Published by the Government Accountability Office on 1971-07-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

   Dear Mr.   Brotzman:
                            0 -v
         In your letter         of May 3, 1971, you requested            information
  concerning     ;yl-.-pT-erty       exchanges  by the General           Services      17
4 Administration         (GSA),

          GSA made about 50 exchanges            of Federal       property   for non-
  Federal    property    during     fiscal   years 1968, 1969, and 1970.
  The fair    market values       assigned    by GSA, on the basis of ap-
  praisers’     reports,    totaled      $45 million      for the properties         ex-
  changed and $38 million           for the properties          received.      For
  some of the exchanges,          GSA also received          cash payments      total-
  ing $11 million.        Thus GSA received           $49 million      in cash and
  property    in exchange for property             valued    at $45 million.

          As a means of measuring       whether    the Government      received
  proper value for the properties            it exchanged,     we examined into
  several      of the exchanged properties       to determine     whether     any
  of the properties        had been sold subsequently        and, if so, to
  compare the sale prices        with the fair       market values     assigned
  to the properties        by GSA. We found that there had been very
  few sales of the exchanged properties,              the only one of any
  significance       was the Lowry Air Force Base property           that was
  discussed      in the newspdper    article    enclosed    with your letter.               L        r3

          At a meeting   on May.27,     1971, with your staff,    it was
  agreed that,     because of the few subsequent        sales of the ex-
  changed properties,      we would furnished      you with certain    sta-
  tistics    comparing   GSA’s sale and acquisition        prices of real
  properties    with their    appraised    fair  market values.

           During    the 3-year period       ended June 30, 1970, GSA sold
  about 800 surplus          real properties.      GSA informed       us that about
  80 percent       of these properties        were sold through       advertised,               *:
  competitive        bidding    and the remaining     properties      were sold       ?3
  through      negotiated      sales.    These properties      were sold at pric&
  totaling       $207 million      which exceeded the appraised         fair    marke%j     $
  values’of       $193 million.        Most of the sales were for relatively
  small amounts,          and there was considerable        variance    between
  these sales prices           and the related    appraised      fair  market values.

                              50 TH ANNIVERSARY      1921-   197


In sales     value,   47 of the properties exceeded $500,000                        and,
in total,     accounted for about 90 percent    of sales.

        The relationship     of these        sales        to appraised     values     is r3.s

                Ratio of
              sales price
            to appraised
Number        fair market
  of              value          Sales          Appraised  fair
 cases         (percent)         price           market value               Difference

    4          Over    130 $ 3,396,OOO               $     1,804,OOO       $ 1,592,ooo
    3        120 to    130   12,027,OOO                    9,733,ooo         2,294,ooo
  18         110 to    120   45,304,ooo                   40,407,000         4,897,OOO
  18         100 to    110  117,606,OOO                  113,231,OOO         4,375,ooo
    2         90 to    100    2,369,OOO                    2,448,OOO             -79,000
  -2          80 to-    90,   4,000,000                    4,884,OOO           -884.000
  47                        $184.702.000             $172,507.000.         $12.195,000

       During the same 3-year period,     GSA purchased about 120                               :/:
real properties      for a total of about $23 million.      In almost
all instances     the purchase price was within-20     percent of the
appraised    fair market value.

                                         Sincerely           yours,

                                         of the United            States

The Honorable  Donald G. Brotzman
House of Representatives