When we refer to public- private partnerships, we are referring to partnerships in which the federal government contributes real property and a private entity contributes financial capital and borrowing ability to redevelop or renovate the real property. The net cash flow is then divided between the private partner and the federal government at an agreed-upon percentage. Multiple potential benefits to the federal government were identified. These potential benefits include the   utilization of the untapped value of real property,   conversion of buildings that are currently a net cost to GSA into net   attainment of efficient and repaired federal space,  reduction of costs incurred in functionally inefficient buildings,   protection of public interests in historic properties, and   creation of financial returns for the government. The properties that were strong candidates for partnerships were located in areas with a strong federal and nonfederal demand for space, and many had untapped value that the partnership could utilize, such as excess land on which a new or expanded building could be built.
What GAO Found

This testimony describes the benefits to the federal government of public-private partnerships on real property. Under these partnerships, the private sector finances the renovation or redevelopment of real property contributed by the federal government. Each partner then shares in the net cash flow. Key factors typically considered in public-private partnerships are whether the properties are in areas with a strong real estate market or strong demand for office space. As a result of these partnerships, the federal government can potentially gain efficient, repaired space, and properties that were once a net cost to the government can become revenue producers. This testimony summarized a July report (GAO-01-906).