O
n his second day in office, President Trump ordered federal workers to return to their offices. However, behind the scenes, his administration is considering a massive sale of government-owned office space to the private sector. According to reports, the General Services Administration (GSA) may sell two-thirds of its 370 million square feet of office stock, potentially putting over 200 million square feet on the market.

    This move could impact GSA leases with private companies, particularly in Washington D.C., where developer Don Peebles estimates that three-quarters of the government's 70 million square feet of leased space could be canceled. The GSA has stated its commitment to optimizing federal building space and reducing underutilized areas, a goal that has been ongoing for years.

    The Trump administration's emphasis on reducing government spending makes a large-scale property sale seem likely. However, the timing is unusual, as it coincides with the mandate for most federal employees to return to their offices. This could lead to a significant reduction in the federal workforce and drive down property values in Washington D.C. "Buildings will sell for 30 cents on the dollar," Peebles warned.

    The GSA must follow a specific process to offload properties, which can result in them selling at significantly reduced prices. This could have a ripple effect on commercial real estate across the district, leading to a dramatic reset of property values.