Donald Trump, Elon Musk Cancel, Restructure Federal Leases

The crusade against the federal government’s real estate holdings is in full swing as hundreds of leases are either canceled or restructured.

Elon Musk’s Department of Government Efficiency claimed to have canceled or restructured 98 leases across the country, CoStar reported. The DOGE website is keeping a running tally of the affected real estate and the purported savings coming from its work, updated twice a week.

The moves already happening impact more than 2 million square feet. DOGE claims that taxpayers are saving $78.9 million from the cuts and alterations.

Unsurprisingly, Washington, D.C. is bearing the brunt of the seismic shift in federal government real estate dealings, accounting for 63 percent of the square footage impacted, as well as 69 percent of the expected savings. The vast majority of the General Services Administration’s real estate holdings are office properties.

The largest lease terminated so far by DOGE is an 845,000-square-foot deal in Washington, D.C. While the agency’s website doesn’t specify addresses, the cut appears to match office space for the Department of Labor’s Bureau of Labor Statistics at 2 Massachusetts Avenue NE; that lease was due to expire in three months. It seems that the lease was not terminated but simply won’t be renewed.

As of last month, the federal government had more than 174 million square feet under lease, paying nearly $5.8 billion annually on rent for those properties. The GSA has 18.4 million square feet of leases due to expire this year and another 54 million square feet under lease with termination rights.

Many numbers have been thrown out in terms of how much Trump and Musk are looking to downsize the federal government’s real estate. A 50 percent slash of the GSA budget has been tossed out, as has the idea of selling two-thirds of the government’s office stock to the private sector.

Landlords exposed to federal government leases may be in for tough times. Office Properties Income Trust’s largest tenant, for instance, was the federal government. Other landlords already impacted by DOGE’s cuts include Easterly Government Properties and JBG Smith.

— Holden Walter-Warner