DOGE Seeks to Shed Vast Amounts of Government Office Space. Here’s How Much the Government Leases, and Where, and What Leases it Can Shed During Trump’s Term


By Wolf Richter for WOLF STREET.
The DOGE people in the Trump administration are considering shedding a big portion of the massive office space that the government owns or leases nationwide, managed by the General Services Administration (GSA), including selling two-thirds of the office space the government owns and terminating three-quarters of the leased office space, according to the WSJ.

Much of this office space is vacant or underused and poorly maintained due to lack of funding, according to GSA testimony before Congress in 2023, cited by the WSJ, which further noted:

“A recent report from Sen. Joni Ernst, a Republican from Iowa who chairs the Senate DOGE caucus, found that not one of the headquarters for any major agency or department in Washington is more than half full. GSA-owned buildings in Washington, D.C., average about a 12% occupancy rate. The government owns more than 7,500 vacant buildings across the country, and more than 2,200 that are partially empty.”

The office sector is already in a depression, with default rates that exceed those during the worst moments of the Financial Crisis. Putting this inventory on the market for sale is going to weigh on the already collapsed prices of older office buildings – prices of 50-70% below the last sale before the pandemic are now common.

And terminating leases is going to stress office buildings, their landlords, and their lenders even more, likely entailing more defaults and foreclosure sales. This is a much needed but very bitter medicine to alleviate government waste.


More here:
https://wolfstreet.com/2025/01...-during-trumps-term/

Unfortunately, in affected areas, these massive cuts in jobs, leases, and selling off property will be awful for many property owners, both residential and commercial, and maybe some lending institutions.

Fixing big problems always entails pain. We need DOGE to do their thing if we are to survive long term, but in the short term it will cause hardships.

quote:

Originally posted by Fly-Sig:
Fixing big problems always entails pain. We need DOGE to do their thing if we are to survive long term, but in the short term it will cause hardships.

Four years of Biden was more painful than correcting his treasonous acts.

quote:

Originally posted by downtownv:

quote:

Originally posted by Fly-Sig:
Fixing big problems always entails pain. We need DOGE to do their thing if we are to survive long term, but in the short term it will cause hardships.

Four years of Biden was more painful than correcting his treasonous acts.

The problem as I see it is the last 50+ years of DC swamp deficit spending. Biden was horrible but not alone. Debt, dependency on government handouts, people becoming soft in every way.

The left is already working hard to pin the blame on Trump. It will get worse as events unfold such as a (likely) significant stock market major correction, continued inflation, etc. Things may appear to get worse as part of the process to fix our country.

Be prepared to counter lefties who will mistake the process as the result, and will blame DJT.

quote:

Originally posted by ridewv:
Unfortunately, in affected areas, these massive cuts in jobs, leases, and selling off property will be awful for many property owners, both residential and commercial, and maybe some lending institutions.

I do not feel sorry for property owners that have been doing business with GSA. Renting to GSA is an above market value gravy train.

Pair it with some kind of redevelopment credit/fast track for approval/force cities to permit office buildings to be converted to residential.

quote:

Originally posted by Fly-Sig:

The problem as I see it is the last 50+ years of DC swamp deficit spending. Biden was horrible but not alone. Debt, dependency on government handouts, people becoming soft in every way.

....Things may appear to get worse as part of the process to fix our country.

Be prepared to counter lefties who will mistake the process as the result, and will blame DJT.

Precisely. The booming DC economy has been somewhat fake, the result of government expansion and spending, whether wasteful or not. The house of cards kept growing, but when it collapses it just makes a larger pile.

quote:

Originally posted by jljones:

I do not feel sorry for property owners that have been doing business with GSA. Renting to GSA is an above market value gravy train.

Unfortunately it's necessary but I feel sorry for them, they provided what government agencies asked them for. It's not their fault that those agencies didn't utilize them to full advantage and are now being shut down. Same with all the other business' that cater to government workers, from restaurants to HVAC companies.

Think about the reduction in property taxes that will be collected due to lowered values.

It's not clear to me whether this much needed initiative is something that's going to affect just Washington, New York and other large cities.

Or is this going to affect smaller towns and cities, or even rural areas. In many of these areas the only federal office space is occupied by a Social Security office or perhaps an IRS office. In my experience most of those offices are at close to 100% occupancy. If there is some sort goal that can only be met by closing offices in these areas, it will be interesting as to what the reaction will be. Also, with the return to office mandate, if an office is closed solely to meet some goal to reduce rented space, what happens to the employees in the closed offices. There are two options. #1 - fire them. #2 - reassign them to other offices. If you take option 2, with the return to work mandate it might be tough to find an office with the space.



Another issue

quote:

Originally posted by ridewv:

quote:

Originally posted by Fly-Sig:

The problem as I see it is the last 50+ years of DC swamp deficit spending. Biden was horrible but not alone. Debt, dependency on government handouts, people becoming soft in every way.

....Things may appear to get worse as part of the process to fix our country.

Be prepared to counter lefties who will mistake the process as the result, and will blame DJT.

Precisely. The booming DC economy has been somewhat fake, the result of government expansion and spending, whether wasteful or not. The house of cards kept growing, but when it collapses it just makes a larger pile.

quote:

Originally posted by jljones:

I do not feel sorry for property owners that have been doing business with GSA. Renting to GSA is an above market value gravy train.

Unfortunately it's necessary but I feel sorry for them, they provided what government agencies asked them for. It's not their fault that those agencies didn't utilize them to full advantage and are now being shut down. Same with all the other business' that cater to government workers, from restaurants to HVAC companies.

Think about the reduction in property taxes that will be collected due to lowered values.

Lowered values??? In what universe does the government not renting a space involve lowered tax values? Tax values aren’t based upon whether the government rents or not. When the .gov stopped renting space for the alphabet agencies here, the spaces were rented the next week.

You’re being fooled that without the government tit, people suffer. I guess you also feel sorry for all the DEI staff that were gotten rid of?

quote:

Originally posted by jljones:

Lowered values??? In what universe does the government not renting a space involve lowered tax values? Tax values aren’t based upon whether the government rents or not. When the .gov stopped renting space for the alphabet agencies here, the spaces were rented the next week.

You’re being fooled that without the government tit, people suffer. I guess you also feel sorry for all the DEI staff that were gotten rid of?

It's a simple fact that when you start having a lot of vacancies, rent values will drop and consequently the buildings value will as well. Those property owners will, and rightly so, petition the county to lower the assessment values. Same with housing. Did you read the article in the link?

The office sector is already in a depression, with default rates that exceed those during the worst moments of the Financial Crisis. Putting this inventory on the market for sale is going to weigh on the already collapsed prices of older office buildings – prices of 50-70% below the last sale before the pandemic are now common.

And terminating leases is going to stress office buildings, their landlords, and their lenders even more, likely entailing more defaults and foreclosure sales. This is a much needed but very bitter medicine to alleviate government waste.


Home listings in the (previously) booming NOVA market are now increasing, they're staying on the market longer, and the values are dropping.

Why should I feel sorry for DEI staff? The topic is commercial real estate

Well it might force the NNN per SF lower which may encourage more people to move in to a place they thought previously unaffordable.

And if we start to re-industrialize the country that would also be a benefit.

But one thing we need to bring back are vocational schools. We need the hands on technical sector revitalized as well. A couple of those nice office buildings might make great schools.

DC exploded under Obama. It was a little crap hole of a town before that.

That’s what it will go back to, provided Trump demolishes the buildings. Selling them may not be enough.

Knock them down, sell them as green space/R1/something to prevent them being built again.

quote:

Originally posted by ridewv:


Why should I feel sorry for DEI staff? The topic is commercial real estate

Because waste is waste and it just shows that you are sympathetic to waste as long as it is waste you agree with. The problems you are wringing your hands over are problems that long ago were created by lefty local governments. You don’t seem to grasp that the needless infusion of government dollars (hint; it’s your money, or more likely inflationary money that was printed that we can’t back) to rent these spaces to feed the pig isn’t sustainable. And the “pain” felt by far left tax and spend schemes in places like DC and NOVA should have been felt decades ago.

We can’t afford it.

Hopefully it slows the urban sprawl in northern VA. I have been going there for years (to visit family) and it seems every time I go there are some more farms and wooded areas that have been turned into massive housing developments full of particle board palaces.

Good.

Now, after divesting themselves of unused buildings and slashing GSA's budget to match, take some of the remaining GSA funding and put it towards expanding in the areas of the country seeing rapid growth. Like the Northwest Arkansas metroplex, one of the fastest growing in the nation.

Our local federal building is filled to bursting, and hasn't been updated in 50 years. DC government buildings may be 40% full, but others are 140% full.

Our local IRS and Social Security offices are sized and staffed for a fraction of the area's current population, resulting in even worse service and even longer waits for citizens around here.

And our federal court system is likewise undersized and understaffed for the volume of cases it's now handling.

It's not all just about "cut the government", but combining cuts with ensuring that the resources go where they're needed rather than where they're wasted.

quote:

Originally posted by RogueJSK:

Our local federal building is filled to bursting, and hasn't been updated in 50 years. DC government buildings may be 40% full, but others are 140% full.

Our local IRS and Social Security offices are sized and staffed for a fraction of the area's current population, resulting in even worse service and even longer waits for citizens around here.

And our federal court system is likewise undersized and understaffed for the volume of cases it's now handling.

It's not all just about "cut the government", but combining cuts with ensuring that the resources go where they're needed rather than where they're wasted.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Thank You.
The Social Security Administration, which last year served a record 68 million beneficiaries, is working with its smallest staff in 50 years, former Social Security Commissioner Martin O'Malley said in November congressional testimony.

That's right. Despite a massive increase in the number of applicants and pending cases, SSA has fewer employees than they did 50 years ago. When DOGE hits Social Security are they going to recommend staffing increases. Not a chance. At a minimum, they'll fire new employees still on probation.

quote:

Originally posted by ridewv:

quote:

Originally posted by Fly-Sig:

The problem as I see it is the last 50+ years of DC swamp deficit spending. Biden was horrible but not alone. Debt, dependency on government handouts, people becoming soft in every way.

....Things may appear to get worse as part of the process to fix our country.

Be prepared to counter lefties who will mistake the process as the result, and will blame DJT.

Precisely. The booming DC economy has been somewhat fake, the result of government expansion and spending, whether wasteful or not. The house of cards kept growing, but when it collapses it just makes a larger pile.

quote:

Originally posted by jljones:

I do not feel sorry for property owners that have been doing business with GSA. Renting to GSA is an above market value gravy train.

Unfortunately it's necessary but I feel sorry for them, they provided what government agencies asked them for. It's not their fault that those agencies didn't utilize them to full advantage and are now being shut down. Same with all the other business' that cater to government workers, from restaurants to HVAC companies.

Think about the reduction in property taxes that will be collected due to lowered values.

They won't reduce property taxes, they will increase the tax rates to maintain the total take, where (old rate x old assessed value) = (new rate x new assessed value), where the new rate and new assessed values can be tweaked any way they like, without a proportional adjustment based on the previous values. It's for the children.

I promise the SSA is wildly overstaffed, compared to a private entity.

Haven’t looked at it, but it’s just how the feds/bureaucrats are.

On the bright side for the feds, once someone actually reviews for fraud, they’ll drop a sizable percentage of the recipients. (According to Sen Kennedy about 6.5 million SS recipients are over 112, so clearly the SSA is doing a horrible job on fraud.)

Feds don’t seem to understand the concept of “rent seeker.”

Outside of… MAYBE basic research, basic weights and measures/the court system, and the Navy/Coast Guard, EVERY person in Federal government lives off the efforts of others.

Now, we may want some of that - but the people working in those areas should understand that they consume, only. They cannot contribute.

quote:

Originally posted by Aglifter:
DC exploded under Obama. It was a little crap hole of a town before that.

No, it exploded under six years of Bush and a Republican controlled Congress who used the guise of the War on Terror.

I’ve lived in the DC Metro area most of my life. I watch the once great state of Virginia turn from solidly red to bright blue as a result of the Republicans reckless spending.

Don’t kid yourself, this wasn’t a problem just caused by Democrats. Plenty of Republicans had their hands in the cookie jar as well.