The great federal building fire sale appears set to begin.
On Tuesday, the General Services Administration posted an inventory of 443 “non-core” assets within its portfolio, Bloomberg reported, signaling the government’s real estate provider was mulling a sale of the properties. The list was not available to the public as of Wednesday morning.
The inventory of assets touches nearly every part of the country: 47 states, Washington, D.C. and Puerto Rico are all represented by the list. The portfolio spans almost 80 million square feet of rentable space across the country. The GSA projects more than $430 million of annual operating cost savings if it sells the inventory, a big ask.
Naturally, the market that would be impacted most by the selloff would be the nation’s capital, where about a third of the non-core assets are located; the market’s share of square footage is even greater. Headquarters buildings for the departments of Agriculture, Energy, Health and Human Services, Housing and Urban Development, Labor, Justice and Veterans Affairs are on the chopping block. Even the GSA headquarters is included in the inventory.
Last week, Donald Trump’s administration ordered agency heads to propose relocation plans for their respective bureaus and offices out of Washington, D.C by Apr. 14.
Michael Peters, who leads the Public Buildings Service, told the publication that the buildings aren’t “for sale by any means,” but that the government would evaluate offers for the properties. Other federal agencies, state and local governments, homeless shelters and nonprofits get the first crack at the federal buildings by law, further challenging the sales process.
The appeal of the buildings on the open market is questionable. Office prices are down 36 percent from 2022 through January, according to Green Street, and that doesn’t even consider the older spaces of the federal government that are not as enticing to tenants and owners as newer trophy buildings.
The GSA has sold more than 1,000 properties in the past decade, comprising 24 million square feet, but this would still mark a massive acceleration of the reduction of the federal government’s real estate holdings.
Elon Musk’s Department of Government Efficiency is on its own quest to cut the government’s property footprint. DOGE claims to have already eliminated 748 leases for the federal government, spanning more than 9 million square feet.
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