Federal Government Moves Into Next Phase of Space Reduction

WASHINGTON, DC—The federal government has been aggressively scaling back its real estate footprint for several years. Now, though, it is moving into a new phase of space reduction that is taking some incumbent landlords aback.

Namely, the government is moving forward with plans to reduce space on a per employee basis, JLL's Joe Brennan tells GlobeSt.com. This has been a stated goal for a while but it is starting to manifest now. "The Hill is on board with this, OMB is driving it and now we are starting to see agencies actually implement it," Brennan says.

"The amount varies from agency to agency but it is roughly 20% to 25% less space per employee," he says. The reduced space is translating into renewals for significantly less space, across the country and, of course, in Washington, DC.

For example, the Securities and Exchange Commission is renewing about half of its space in Chicago, he says. Another federal lease in Atlanta is renewing about 25% less.