Our facilities are the primary place of interaction with many of our customers. We’re focused on developing innovative solutions to improve that customer experience and provide world-class service. Our real estate portfolio of approximately 32,000 buildings includes 273 million square feet of interior space. It’s vital that we manage and adapt our building portfolio to align with customer and organizational needs at a sustainable cost. The Facilities team provides appropriate facilities for Postal Service needs to ensure proper stewardship and management of real estate inventory and related resources.
Facilities performs strategic planning through “node studies” analyzing the processing, delivery and retail use of existing facilities, and current and future local service needs. This identifies communities that can benefit from additional or modified capacity and locations where capacity exceeds the needs of the Postal Service, representing potential opportunities for savings and revenue generation. The 64 node studies approved in FY2016 represent $116.5 million in net present value in potential savings.
We executed over 5,000 leases in FY2016, ensuring USPS operations could continue at these properties. Despite increases in lease rates driven by the recovering economy, lease rates were negotiated at 10.1 percent below market value aggregately. The sale and leasing of excess rental real property generated $285.7 million in gross receipts. This trend is slowing as economic conditions shift and opportunities decrease.
In FY2016, the Facilities team implemented portfolio modification projects ranging from emergency replacements to planned infrastructure changes supporting organizational and network initiatives. Facilities completed 52 new construction projects and 42 projects to consolidate or repurpose space within existing owned or leased buildings. These projects enable the Postal Service to provide enhanced services, maintain or restore operations after catastrophic events, and combine multiple facilities into fewer or smaller locations when appropriate. It also allows us to take advantage of less costly space, sell large underutilized properties or move to smaller, more efficient space.
To meet the continual need to maintain our buildings, in FY2016, we completed over 58,500 repair, alteration and replacement projects along with 387 upgrades for the Premier Post Office program. We also finished 182 upgrades to maintain customer access in locations impacted by POStPlan, the strategy to modify retail window hours to match customer use. These measures ensure safety, security and serviceability of Postal Service buildings as we maintain and right-size our network to provide a positive customer experience.
The current industry trend of consumer migration away from brick-and-mortar shopping to e-commerce, and the resultant growth in our package business, continue to impact our facilities portfolio management plan. However, the Facilities team continuously innovates and adapts the plan to address these marketplace developments.
Team Cleaning at USPS – As cleaning science and technology have evolved tremendously, our maintenance operations organization began researching and testing new custodial processes. The American Postal Workers Union and the Postal Service agreed on new team cleaning standards and nationwide implementation has been ongoing since June 2014.
Our employees and the environment continue to reap the rewards of team cleaning concepts that emphasize cleaning for health instead of just cleaning for appearance. New processes use a standard set of chemicals distributed in ultra-small collapsible packets designed for easy recycling.
During FY2016, much of the Team Cleaning effort has been focused in the major Processing & Distribution Centers. The Postal Service has begun to implement this new process in the smaller retail units as well. Team cleaning has now been implemented at more than 200 sites since its inception and has achieved a total savings of $45 million.
