Having heard tidbits of the federal government's plans for its massive real estate portfolio, local commercial realtors are eagerly waiting to hear how the strategy will be executed.

"We'd certainly like to be invited to any type of information or consultation sessions that they will likely have with stakeholders and we are certainly a stakeholder," said Rick Furano, president of the Building Owners and Managers Association of Ottawa.

At a recent real estate forum in the city, Tim McGrath, director general for the real property branch of Public Works and Government Services Canada, spoke about the direction the federal government is considering in its new real estate strategy, which could include selling some government-owned facilities.

Steve Nicoletti, director of leasing for O&Y Enterprise Limited Partnership, said execution of the strategy would be the most difficult part of the process.

"As a taxpayer, I'm certainly appreciative of the objective. I'm anxious to see how they are going to execute their strategy. I think the strategy overall sounds good, it makes sense, I just would like to see the next stage of it," said Mr. Nicoletti.

"They're going to be hiring some outside third party to look at how they are going to actually execute this and that's the part that will be interesting to see because I don't think it's as black and white as it first appeared."

Last month, Mr. McGrath said one goal is to shave 15 per cent off the $800 million the federal government pays in leases in the next five years.

While he gave little detail on how the savings would be realized, he said the government would be "aggressive" in its approach to landlords, especially on leases coming up in 2005 and 2006.

"We need better lease negotiation strategies to get better rates," said Mr. McGrath. "I don't want to pay your risk on financing."

Traditionally, the federal government has signed "gross rent" leases.

This often meant that if utilities and service costs went up, the landlord was liable for the added expense. Mr. McGrath said Public Works would be willing to go to net leases to cover additional service costs if it meant getting competitive net lease agreements.

In addition to getting better rates, Mr. McGrath said he would need temporary office space while older buildings are being renovated and would like help from the private sector to renovate the buildings as cost efficiently as possible, he said.

That is a wise initiative according to David Lees, senior vice-president and managing director of J.J. Barnicke Ltd.

"The competitiveness of third party management is very strong these days. The margins are very small, so some people really are able to manage buildings a lot cheaper than others," said Mr. Lees.

Part of the strategy to reduce leasing costs could mean relocating federal employees out of the core, Mr. McGrath said.

However, KRP Development Group president Martin Vandewouw is frustrated Public Works will not consider using prime office space in Kanata, where high vacancy rates have pushed down the cost per square foot for Class A space.

"For the last three years, there's been no question that we have been out in front of the feds in terms of saying, 'Hey, guys, there are opportunities in Kanata'," said Mr. Vandewouw.

At the least, Mr. Vandewouw thinks Kanata is an ideal swing space for workers while older buildings are retrofitted to get them up to code.

"You lease a building out in Kanata or wherever that's plug and play, ready to go and you can get a five- or a 10-year deal on it at below market rates because that's what the market is right now in Kanata and everybody wins," said Mr. Vandewouw.

"If not from a permanent level, at least for a five- to 10-year swing space standpoint but, no, they would rather move the RCMP into a Bay store in the Orleans shopping plaza, as opposed to Class A office space that is sitting in Kanata."

Mr. McGrath has said a lack of infrastructure is a problem in Kanata, as well as convincing Gatineau workers to travel to the west end.

However, thousands of federal government workers live in Kanata and commute downtown every day, Mr. Vandewouw said, adding approximately 5,000 high-tech workers used to commute to Kanata in the high tech boom and the infrastructure worked then.

But Mr. Nicoletti agrees it would be difficult for a Gatineau worker to commute to Kanata.

"The infrastructure we have today is designed to take us downtown, it is not designed to take us out of downtown unless you are on the off-hour. Most express buses and so forth go from the outside, take us in and then at night it takes you back out again," said Mr. Nicoletti.

Mr. Vandewouw said that could easily be fixed.

"Of course public transit isn't in place. OC Transpo is not in the business of putting a service in place that nobody is going to use. The federal government is by far (OC Transpo's) largest single customer. You put 1,000 federal employees out in Kanata, you can bet that OC Transpo is going to be bending over backwards to make sure that the transportation services are in place to service that need."

Mr. Lees said the government should take a serious look at Kanata.

"Frankly, I think it would really tie this whole region in if we did see a major department move out into Kanata," said Mr. Lees. "In Toronto, when the major banks moved 900,000 square feet of office space out into Mississauga and Oakville, all of a sudden (what was) the commute for those people that were living in the east end of Toronto? You have a major life decision to make, do I move out there? Is this my career? So maybe you do move."

Mr. McGrath also suggested his department would look at going to Quebec if Ottawa landlords did not give the type of deals he seeks. But Mr. Nicoletti said the government would be forced to build new buildings in that province because there is inadequate infrastructure there.

"Market forces prevail. Is it cheaper? Yeah, it probably is, but again you're not comparing apples to apples. There's just that many more costs associated with one side or the other or vice versa, it's a different environment," said Mr. Nicoletti.

Mr. Lees added that infrastructure, such as bridges, would continue to pose a problem in routing people to Gatineau, as would getting many government workers to agree to work on the Gatineau side, where there are not as many amenities for business.