It's been known that federal office buildings around the country were slated to close under the Department of Government Efficiency’s (DOGE) budget-cutting action. Now it's clear when it will happen.
An internal document from the General Services Administration (GSA), which manages the government’s real estate assets, lists dozens of federal offices and building leases slated to end by June 30, according to an Associated Press report. Some agencies are appealing to DOGE to exempt specific buildings.
DOGE maintains a list of canceled real estate leases, which includes buildings used by the Internal Revenue Service, the Social Security Administration, the Department of Agriculture, and the U.S. Geological Survey. Lease terminations do not mean all locations will close, as some agencies may negotiate new leases to stay in place, downsize, or relocate, said the report.
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DOGE said the GSA has notified landlords of plans to terminate nearly 800 leases to save about $500 million. Most of the targeted agreements can be ended in months without penalty.
Many landlords had been expecting government agencies to remain tenants for several years under existing leases. But the AP report said some agencies learned that their leases were being terminated from building managers and not their federal partners.
Chad Becker, a former GSA real estate official who now represents landlords with government leases at Arco Real Estate Solutions, said it may be difficult for some agencies to move their personnel and property out of targeted spaces on a tight timeline. This could result in agencies paying additional rent during a holdover period, he told the AP. The Building Owners and Managers Association has alerted landlords to be prepared to seek payment from federal government tenants who overstay their leases.
However, the federal government’s real estate portfolio was downsizing long before DOGE arrived on the scene. The federal government’s real estate portfolio has been shrinking over the past decade. In January, President Biden instructed agencies to measure the true occupancy rates of leased spaces and dispose of spaces that did not have a 60% use rate over time.
During a recent congressional hearing, David Marroni, a Government Accountability Office official, testified that the push to unload unnecessary federal real estate was “long overdue.” He said some agencies have held on to unnecessary space for too long. Still, he warned the downsizing should be carefully planned to generate savings and avoid mistakes and unexpected impacts to agencies.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
