The Trump administration made headlines on Tuesday by announcing the availability of hundreds of federally owned properties for sale. This includes significant buildings such as the headquarters of the Justice Department, Labor Department, and the U.S. Census Bureau. If successfully implemented, this initiative could drastically reduce the size of the federal real estate portfolio, significantly impacting the Washington, D.C. area.
The General Services Administration (GSA), the government's real estate arm, released a list of 443 office properties identified as "not core to government operations." This move is part of a broader effort to streamline the federal government and reduce operational costs. The announcement came just hours before President Donald Trump was scheduled to address a joint session of Congress, indicating the administration's urgency in moving forward with this plan. The GSA categorized these properties as "vacant or underutilized."
However, shortly after the initial release, 123 rows were removed from the list, excluding all properties located in D.C. and most from neighboring Virginia and Maryland. The reasons behind this sudden omission remain unclear, as a GSA spokesperson did not immediately respond to inquiries.
While some properties were previously marked for sale, others represent the Trump administration's aggressive stance on reshaping federal operations. Although the plan has national implications, the capital region stands to be the most affected. Nearly one-third of the buildings targeted for closure are situated in D.C. or its Maryland and Virginia suburbs.
Initially, the administration aimed to dispose of 41 locations in D.C., encompassing approximately 17 million square feet of federal property. Notable buildings on the list include the Justice Department's Pennsylvania Avenue NW headquarters, commonly referred to as the Robert F. Kennedy Building, the Social Security Administration’s Wilbur J. Cohen Building, and the Agriculture Department’s South Building near the National Mall.
Additionally, the U.S. Census Bureau headquarters in Suitland, Maryland, is included, along with 82 other buildings and a total of 11.4 million square feet in the state. Other identified "non-core" federal properties in D.C. include the Labor Department headquarters, the American Red Cross building, and the National Museum of American Diplomacy.
The GSA, which manages 47 million square feet of property in the D.C. region, has stated that the operation and maintenance costs for non-core assets exceed $430 million annually, with recapitalization needs surpassing $8.3 billion. A spokesperson emphasized that the list of non-core assets is subject to change, reflecting the fluidity of the administration's strategy.
The scale of this initiative has shocked regional officials and real estate experts, especially amidst the ongoing efforts by the Trump administration and tech billionaire Elon Musk's U.S. DOGE Service to reduce federal property and cut agency staff by up to 90 percent. The announcement follows a wave of federal office lease terminations, leading to confusion among employees who were recently ordered to return to the office only to find many locations earmarked for closure.
A former senior GSA official expressed skepticism about the administration's ability to successfully dispose of such a vast number of properties, particularly after the layoffs of personnel responsible for managing these transactions. The official noted that many buildings are currently occupied and relatively new, raising questions about the feasibility of selling them.
Additionally, compliance with historic preservation protections and environmental impact regulations complicates the disposal process, as highlighted by the official's concerns over the inclusion of a federal courthouse built less than a decade ago on the list.
Local officials, including Rep. Gerry Connolly (D-Virginia), whose district encompasses many government workers, acknowledged the necessity of evaluating the federal footprint. However, Connolly criticized the "DOGE approach" as thoughtless, arguing that it underestimates the utility of federal agency resources and properties, potentially leading to significant costs for taxpayers.
The potential changes could destabilize the Washington Metro system, which was initially designed to accommodate federal employees. Connolly pointed out that a third of the metro stations are situated above federal properties, emphasizing the mutually beneficial relationship between the federal government and the transit system.
Some D.C. officials see an opportunity in the sale of underutilized federal buildings, as these properties could be repurposed for diverse uses, generating property taxes for the city. In particular, there is enthusiasm for developing neighborhoods that connect the National Mall with the Wharf district, currently occupied by large federal offices.
Steve Teitelbaum, an adjunct professor of real estate at American University, noted that transitioning federally exempt properties to private ownership could be beneficial for the city. However, he cautioned that the success of this initiative hinges on finding buyers in a challenging commercial real estate environment. "If you dump it all on the market at the same time when the market is already depressed, what are you going to get for it?" he questioned.
