The Trump administration is quickly implementing new space reduction measures.
On the evening of Sunday, February 2, the Elon Musk-led Department of Government Efficiency (DOGE) announced it had canceled 22 leases, resulting in $44.6 million in savings for the federal government. The post did not specify which buildings were affected by the lease terminations.
Previously, on January 27, DOGE reported the cancellation of three leases for “mostly empty office space,” amounting to $1.6 million in savings. This update was retweeted by Stephen Ehikian, the newly appointed acting Administrator of the General Services Administration (GSA). The recent post noted that the number of lease cancellations had risen from three to 22 within just six days.
This swift uptick has caused concern in the market, according to a federal real estate leasing expert who spoke to Bisnow. The source, who requested anonymity due to their government work, mentioned rumors circulating that many more lease terminations are expected, especially for the GSA’s “soft-term” leases, which allow for rolling expiration options. The GSA, which manages the federal government’s 360 million square feet of owned and leased properties, did not respond to requests for comment by publication time.
Under President Trump and Musk’s leadership, the administration has taken rapid steps to cut government spending. One of Trump’s early actions was to order agencies to eliminate all positions related to diversity, equity, and inclusion. He also froze nearly all foreign aid and attempted to suspend federal grants. Additionally, last week, the administration offered federal employees a chance to resign by Thursday and receive pay through September as part of a strategy to reduce the federal workforce.
The U.S. Agency for International Development (USAID) closed its headquarters on Monday, February 3, after Musk announced that Trump had agreed to shut down the agency. Secretary of State Marco Rubio confirmed that he is now the acting director of USAID, which has been folded into the State Department. USAID’s office is located in the federally owned Ronald Reagan Building and International Trade Center on Pennsylvania Avenue.
On January 24, Ehikian ordered an indefinite pause on all GSA acquisitions, including leases. A GSA memo to acquisitions staff explained that this pause would allow the new leadership to assess key acquisition actions and direct any necessary course corrections.
“The Trump administration’s strategy is to prioritize leased space over owned properties, with plans to aggressively offload federal real estate,” GSA Public Buildings Service Commissioner Michael Peters said during a Public Buildings Reform Board meeting. “The presumption is going to be that space should be leased unless there’s some factor that says it should be owned. There is excess space in the leased portfolio, and efforts are underway to address this.”
A December analysis of GSA data by S&P Global Ratings revealed that approximately 52% of the federal government’s office portfolio has lease expirations or termination options by the end of 2028. Of this, 59% consists of expiring leases, while 18.5% has termination options.
Source: Bisnow