Elon Musk may have walked away from his high-profile role in Washington, but the shakeup he set in motion within the federal government is far from over—especially for the commercial real estate sector. As bureaucratic footprints shrink and agency headcounts decline, the Office of Personnel Management is signaling a more permanent shift toward leaner operations and reduced office space.
The agency's Director, Scott Kupor, former partner at venture capital firm Andreessen Horowitz, has stepped into the void, reshaping the controversial Department of Government Efficiency, or DOGE. While Musk’s brash tactics may be gone—along with his bitter public feud with President Trump—Kupor is determined to keep the mission alive. According to the Financial Times, Kupor affirmed that the department is “here to stay,” and that its focus on optimizing government operations remains unchanged.
Still, Kupor is interested in reforming Musk’s legacy rather than preserving it wholesale. He has been critical of some of the more labor-intensive elements, such as requiring weekly progress reports from all civil servants—a measure he described as “a very manual process” that lacks efficiency and would need to be reconsidered.
However, Kupor also emphasized that the intention behind those measures was sound: “What [DOGE] did was catalyze the start of a process,” he said. “Now, we have to actually institutionalize those things” and pursue long-term operational efficiency, he told the Financial Times.
That drive for efficiency is already having ripple effects. Kupor has laid out plans to slash as much as a third of the OPM staff, in addition to cutting hundreds of government contract jobs. While many of these departures are expected to be voluntary, Kupor acknowledged that key programs, such as early retirement incentives, have yet to receive authorization and funding from Congress.
Perhaps more drastically, OPM is now “actively looking” at downsizing its physical office space, a move that could significantly impact the commercial office leasing market. As federal agencies shed space and embrace remote work, demand for government-leased offices is poised to drop even further.
Yet, in an unexpected twist, budget documents reviewed by Politico show that DOGE itself is slated for expansion. The department’s staffing is projected to increase from its current headcount of 89 to 150 by fiscal year 2026. Funding for the department will come mainly from the very agencies DOGE is tasked with overseeing.
Kupor remains unfazed by potential backlash. “If I get run out of town because people don’t like what I’m doing, I’m OK with that,” he said at a press conference. “I’m here because I really think it’s important… I really do believe that we’re on an unsustainable fiscal path.”
As Washington battles over headcounts and bureaucracy, CRE faces yet another reckoning: fewer workers mean less need for leased space—and for the industry, that could mean a slow, steady erosion in one of its long-standing client sectors.
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