The heads of all federal agencies are on the clock to come up with a plan for their departments to leave the nation’s capital.
Donald Trump’s administration is giving agency heads until Apr. 14 to propose relocation plans for their respective bureaus and offices out of Washington, D.C., the Washington Post reported. The guidance from the Office of Management and Budget and the Office of Personnel Management calls on agencies to set sights on “less-costly parts” of the nation.
The guidance wasn’t the only move by the administration on Wednesday with a direct impact on real estate. Trump also signed an executive order giving agencies only seven days to submit a property inventory. They also have 30 days to inventory all leases that can be terminated.
From there, the General Services Administration will have 60 days to form a plan to dispose of any real estate deemed unnecessary.
A mass relocation of federal bureaus to parts unknown will create winners and losers across the country, but those most at risk are office owners in the nation’s capital region. About 15 percent of the region’s workforce is made up of federal employees.
Diana Parks of the National Federal Development Association, which represents landlords who lease to the federal government, warned of a significant hit to the area’s commercial real estate market.
“For all of it to hit the market in a short time, it’s just a supply-and-demand issue that’ll drive down the value of that real estate considerably,” Parks told the Post.
There’s a reasonable question as to whether Trump’s timeline can even be met. Fewer than half of the government’s leases are eligible for termination, according to the GSA. Even those that can be terminated could lead into drawn out legal battles if landlords allege breaches of contract.
But there’s no doubt the Trump administration is on a cost-cutting spree in federal real estate. As of Wednesday, Elon Musk’s Department of Government Efficiency reported 254 terminations, $114.7 million in annual lease value canceled and total savings of $255.3 million.
Some of DOGE’s calculations, however, have been called into question.
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