Trump may sell much of federally owned office space to private entities

The Trump administration wants to sell two-thirds of the government’s office stock to the private sector, according to published reports.

Additionally, the General Services Agency may cancel leases on 70 million sf of Washington, D.C., office space that is privately owned. If the administration follows through, the actions could roil the D.C. commercial property market.

Many landlords in the D.C. area rely on the government as an anchor tenant. The GSA manages 370 million sf of federal buildings nationwide. If the GSA cancels leases en masse, property values could fall and leave owners without many options for new tenants.

Federally owned buildings have had funding for repairs and maintenance cut in recent years, leaving building conditions to deteriorate. The situation is complicated by another Trump decision to mandate return-to-office policies that would logically lead to higher occupancy rates at government offices. Whether that policy would notably impact plans to divest government office space is unclear.