On the first day of his second term, President Donald Trump ordered federal employees back to the office. Yet, behind the scenes, his administration is reportedly considering selling off a significant portion of federal office space.
According to the Wall Street Journal, the Trump administration is evaluating the sale of two-thirds of the government’s office properties to the private sector. This could put over 200 million square feet of office space on the market, out of the 370 million square feet managed nationwide by the General Services Administration (GSA), the federal agency that oversees government properties.
Leases with private landlords could also be in jeopardy, particularly in Washington, D.C., where the government leases 70 million square feet. Real estate developer Don Peebles estimated that as much as three-quarters of that leased space could face cancellation under Trump’s administration.
“GSA continues to work to right-size the federal portfolio and remains committed to optimizing space in federal buildings,” a GSA spokesperson said.
Efforts to reduce underutilized federal spaces have been ongoing for years, highlighted by a 2023 Government Accountability Office report. However, the Trump administration, which has prioritized cutting government spending, appears to be accelerating those efforts.
The timing of this potential selloff is notable, as it coincides with Trump’s mandate requiring most federal employees to return to their offices. Critics suggest the move may be designed to prompt attrition among federal workers, especially as the administration has also implemented a hiring freeze.
If these office sales and lease reductions proceed, Washington, D.C., landlords could bear the brunt of the fallout. The GSA’s property sales process often results in steep discounts, which could significantly drive down commercial real estate values in the area.
“Buildings will sell for 30 cents on the dollar,” Peebles told the Journal. “It’s a paradigm shift. There will be a dramatic reset on property values.”
