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Shutdown gave NGBs new perspective on office space

USA Cycling CEO Rob DeMartini will find tenants for space the NGB no longer needs.ap images

Olympic national governing bodies have been scrambling for ways to alleviate their growing financial strains. Some relief has come via federal Paycheck Protection Program loans, and many NGBs have implemented layoffs and furloughs to cut costs. Now several leaders of NGBs based in Colorado Springs, Colo., are turning to real estate as an opportunity to minimize spending — or even generate new revenue.

USA Cycling was the first NGB to announce a workforce reduction in March, trimming its headcount by around one-third between layoffs and furloughs. CEO Rob DeMartini said that the smaller staff and a smooth transition to work from home led the NGB to consider how best to use its office space. “On top of that, we own the building,” he said. “We really thought about can we better sweat the assets by putting other tenants into the building in the space that we didn’t need.”

Cycling will consolidate its footprint to the east wing of its building, while the west wing will be made available to potential tenants, ideally other NGBs. Cycling began quietly floating the opportunity to its fellow NGBs in April. “We have found people that fit and want to be there. There was a high degree of interest,” said DeMartini, who added that at least three NGBs are actively pursuing the opportunity and are now trying to get out of their current leases.

Cycling wouldn’t be alone as an NGB landlord. USA Volleyball owns its building and rents space to USA Archery, USA Fencing and USA Table Tennis. USA Triathlon also owns its 40,000-square-foot, three-story office and uses half of it, though the NGB has just listed the building for sale. Triathlon has owned the building since 2014, when it was gifted the office by Nor'wood Development Group (Nor'wood also gifted USA Cycling its headquarters in Colorado Springs). Triathlon is looking for $6.25 million for the building. Triathlon's tenants include USA Ultimate as well as several corporate tenants, though the rental space hasn't historically been a profit center. In 2018, the year of the NGB's most recent tax return, building costs were around $350,000 per year.

Even some NGB renters are looking for ways to minimize their office expenses. Last month, USA Weightlifting announced it would introduce an indefinite work from home policy, and Weightlifting CEO Phil Andrews said his NGB will also look to downsize its space when its lease with the U.S. Olympic & Paralympic Committee is up at the end of the year, though he expects it will offer only minimal cost savings. “It provides trust and flexibility to our staff,” said Andrews. “But also the ability for us to have people all over the country … whilst retaining a working space in Colorado Springs.”

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