According to a report from the Wall Street Journal, the Trump administration is considering selling off two-thirds of the federal government’s 363 million square feet of owned office real estate to private companies. Additionally, it is likely that about three-quarters of the General Services Administration’s (GSA) leased space in Washington D.C., which makes up nearly half of their national total, will be canceled.
Developer Don Peebles, who has a strong presence in the D.C. market, told WSJ that much of this office stock could potentially come onto market at discounted prices. This could have a negative impact on other D.C. office buildings which have already seen declining values in recent years.
Peebles predicts that these buildings may sell for as little as 30 cents on the dollar due to this “paradigm shift.” S&P Global estimates that by 2028 when President Trump’s second term ends, approximately 52%of federal government leases will be eligible for termination. According to Business Journals , Trepp senior research manager Thomas Taylor believes early terminations would significantly reduce landlords’ rental income.
The GSA headquarters building located in Washington D.C.
