Trump seeks to put 443 federal properties up for sale
Among the departments whose buildings are up for sale are Agriculture, Energy, Health and Human Services, Housing and Urban Development, Labor, Justice and Veterans Affairs
THE US government is considering selling a sprawling portfolio of properties across 47 states, the District of Columbia and Puerto Rico, part of President Donald Trump’s campaign to shrink the federal workforce – and the buildings it occupies.
An inventory of 443 “non-core” assets posted by the General Services Administration (GSA) on Tuesday (Mar 4) included many of the prime commercial buildings that house local and regional offices for federal agencies and provide services for taxpayers, Social Security recipients, farmers and workers.
In total, the structures represent almost 80 million rentable square feet (sq ft) of usable space.
The GSA estimates that selling them could save over US$430 million in annual operating costs, a key focus for Trump and his efforts to reduce government spending.
They are not on the market yet, but posting the list reflects the administration’s intention to sell off government-owned real estate.
“Just because something is on the non-core list does not mean it’s for sale by any means,” Michael Peters, a former investment banker tapped by Trump to lead the Public Buildings Service, said. “But if someone put an offer on the table, we would evaluate it.”
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It’s not clear how much the government’s buildings could be worth, given the idiosyncrasies of each property and market, or even what it could expect to net in a sale.
Overall, commercial real estate is still reeling from the double-whammy of higher interest rates and the Covid-19 pandemic. According to real estate analytics firm Green Street, office prices fell 36 per cent from a 2022 peak to January.
Remote work has also cut demand for office space, leaving many big cities with more vacancies. But converting commercial buildings for residential use is difficult at a time when construction and financing costs are steep.
Commercial tenants these days tend prefer new space with more amenities; many of the buildings in the federal portfolio are old and may be in need of significant repair, as Peters told the Public Buildings Reform Board in January.
“The deferred maintenance is reflected in the condition of these buildings,” he said.
Iconic properties
About a third of the buildings on the list are in the Washington, DC metro area, but they make up a disproportionate share of the square footage – in part because major agencies have their headquarters there. Among the departments whose buildings are up for sale are Agriculture, Energy, Health and Human Services, Housing and Urban Development, Labor, Justice and Veterans Affairs.
The GSA is even proposing the sale of its own headquarters.
The Trump administration is exploring moving agencies outside of the District of Columbia to save money on rent and salaries.
Those relocations would threaten the already hard-hit DC office market, and Peters said the GSA needed to be “very thoughtful” about its properties there, given the outsized influence that the federal government has on the commercial real estate market.
As it is, the share of DC office space available for lease was nearly 24 per cent at the end of 2024, higher than the city’s pre-pandemic availability rate and above the current level in Manhattan.
“In an already weak market for office space, this will make the situation a lot worse, particularly in cities where government buildings and the government workforce make up a large percentage of the market,” said Ruth Colp-Haber, president of Wharton Property Advisors.
“Especially in a market such as DC, there’s no white knight out there that will be able to swoop in and buy them and be able to use them in their current condition.”
Other buildings eligible for sale include historic properties such as 19th-century customs houses in New Bedford, Massachusetts; Portland, Maine and Norfolk, Virginia, where the US once collected the import duties that funded the federal government before income taxes.
But some are newer buildings, including the John A Volpe Transportation Systems Center in Cambridge, Massachusetts, and a regional office for the Federal Emergency Management Agency in Thomasville, Georgia.
And they range in size from the 4,500-room Department of Agriculture building in Washington – once considered the world’s largest office building before the Pentagon was completed – to a 74 sq ft toll booth at the Good Neighbor International Bridge in El Paso, Texas.
A specialised scientific facility – the Satellite Operations Center in Suitland, Maryland – made the list. It controls weather satellites for the National Oceanic and Atmospheric Administration. GSA has previously designated the facility as a “federal high-performance building” with low operating costs.
The names of the buildings also suggest their historic legacies. The John F Kennedy Federal Building in Boston and the Speaker Nancy Pelosi Federal Building in San Francisco could be sold, as well as the Rosa Parks Federal Building in Detroit and the Martin Luther King Jr Federal Building in Atlanta.
Shrinking portfolio
While the GSA list is notable because it includes some of the nation’s most well-known public buildings, the move to downsize the government’s real estate inventory has been going on for more than a decade. Since 2015, the government has sold more than 1,000 properties totalling 24 million sq ft. In December, the Biden administration proposed selling eight federal buildings totalling 1.5 million sq ft.
It’s also unclear how soon sales could happen. Federal law requires excess property to be offered to other federal agencies, state and local governments, homeless shelters and other non-profits before they can be sold in the private market.
Some of the properties could also be sold and leased back to the federal government. The point, Peters said, is to eliminate under-utilised space, reduce maintenance costs and centralise property management.
“Core” federal buildings like courthouses, laboratories, land ports of entry and buildings occupied by law enforcement are typically exempt from sales, as are “intrinsically significant” buildings such as the White House and National Building Museum.
Since inauguration, Trump’s adviser Elon Musk has directed attention to properties the government rents from private landlords, claiming credit for cancelling 748 leases totalling more than nine million square feet.
“Crazy that the government was just renting and paying for upkeep services of hundreds of empty buildings!” he said on his social media platform last week.
At the same time, Trump, Musk and the Office of Personnel Management have made it a priority to eliminate remote work for federal workers, leaving some to wonder whether they will have an office to return to.
Any decision to sell a government property will consider not only the sale proceeds but the maintenance costs the government would avoid, as well as the expense of relocating workers to another space, Peters said. BLOOMBERG
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