The Fed's Footprint Is Critical to Understanding Office's Potential Danger

Even the giant of federal office leasing wants to pare back on $5.8 billion in annual spending.

The federal government is a huge user of leased office space, with 179.3 million square feet in rentable square footage, according to the most recently available from the General Services Administration. That could be a sleeper issue for office property owners.

“Government buildings historically have been known to have stable property cash flow, as these government tenants don’t move office locations frequently and often just renew their existing leases,” noted Trepp. That is no longer a given. “However, with remote and hybrid work becoming a common option for private businesses and federal agencies alike, office occupancy in D.C. dropped 1.2 million square feet in 2022 and saw an overall 79.5% occupancy.”

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Erik Sherman

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