Line 8 - Present Value of Total Cost of Services & Utilities per USF - Second Column of
Line 13, Worksheet 1;
Line 9 - Lump Sum Cost of Alterations per USF - Line 8, Worksheet 1 divided by the
Total USF, which is Line 5, Worksheet 1;
Line 10 - Market Comparable Purchase Price - This is an estimate of the current market
purchase price of buildings similar in size, age, quality of construction, and location to that
which would best satisfy the space requirements. The CO should obtain comparable
asking and sales prices for real property from knowledgeable sources such as brokers,
agents, owners, industry publications and databases, GSA, and other Federal agencies
with delegated leasing authority. The market comparable purchase price will be stated in
terms of dollars per gross square foot of building ($/GSF);
Line 11 - Total Market Comparable Purchase Price per GSF - Line 7 multiplied by Line
10, divided by Line 5;
Line 12 - Total Cost to Purchase Real Property - Line 9 plus Line 11 - This number
represents the cost of purchasing the real property added to the cost of alterations;
Line 13 - Present Value per USF of Real Property's Residual Value at the end of the
Holding Period - In order to compare leasing with purchasing or construction, the
ownership position of VA at both the beginning and the end of the analysis period must be
identical. In this instance, VA is presumed to begin and end the analysis period with no
interest in real property. In the case of a lease, VA will have no interest after the lease
expires. VA will still own improved real property at the end of the Holding Period in the
cases of a purchase or construction. The remedy is for the analysis to anticipate the sale
of the real property. The net proceeds from such a sale must then be discounted back to
the present. The CO should consult with the local Fiscal Office if unsure of the manner in
which to complete this calculation;
Line 14 - Net Cost to Purchase and Occupy Real Property - Line 12 plus Line 8 minus
Line 13.
The Construction Alternative - To analyze this alternative, the CO completes Worksheet
3 - Construction Analysis. Listed below are detailed explanations of the assumptions and
inputs for Worksheet 3:
Line 1 - Firm Term - from Line 1, Worksheet 1;
Line 2 - Renewal Term - Line 2, Worksheet 1;
Line 3 - Line 1 plus Line 2;
Line 4 - Discount rate - Line 4, Worksheet 1;
Line 5 - Total USF - from Line 5, Worksheet 1;
BENEFIT COST ANALYSIS -- 4 of 11
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