The General Services Administration announced plans to put 320 "non-core" federal properties up for sale in the near future as part of the effort to cut the federal workforce.
After listing several iconic Washington, D.C., federal office buildings like the J. Edgar Hoover Building, which serves as the FBI headquarters, and the Robert F. Kennedy Building, which houses the Department of Justice, the GSA amended the list a few hours later that excluded all federal properties in D.C.
More than 80% of the federal workforce lives and works outside of the Washington, D.C., metro area. Some of the largest federal office buildings are still going to be put up for sale, including the Major General Emmett J. Bean Federal Center in Indiana, the Sam Nunn Atlanta Federal Center, and the Speaker Nancy Pelosi Federal Building in San Francisco.
“We are identifying buildings and facilities that are not core to government operations, or non-core properties for disposal,” the GSA said in a statement. The statement added that it “ensures that taxpayer dollars are no longer spent on vacant or underutilized federal space,” and selling the properties “helps eliminate costly maintenance and allows us to reinvest in high-quality work environments that support agency missions.”
Selling the buildings will save about $430 million and sends a clear, unmistakable signal that the reduction in the federal workforce is permanent and that there's no going back.
“For decades, chronic underfunding has left many of these buildings functionally obsolete and unsuitable for the modern federal workforce,” the statement claimed. “We can no longer assume that funding will materialize to fix these longstanding issues.”
A White House official granted anonymity to discuss internal decisions said that the structures GSA plans to offload “all have building repairs that would be cheaper to sell than fix.” GSA keeps numerous metrics on federally owned buildings including maintenance costs, age and occupancy that can be used to make disposal decisions, an agency official said.
After an earlier version of this story published, the “non-core” properties was updated to exclude all Washington buildings and dozens in Maryland in Virginia that were previously included. The White House did not respond to a request for comment about why the changes were made.
GSA did not say where the thousands of federal workers housed in these buildings would work or speculate on what entity would buy such buildings. The Trump administration has been pressuring workers who had been telecommuting to work in person.
Michael Peters, a former investment banker whom Trump chose to lead the Public Buildings Service, said, “Just because something is on the non-core list doesn’t mean it’s for sale by any means." He added, “But if someone put an offer on the table, we would evaluate it.”
Selling a lot of those buildings is going to be a huge challenge. Bloomberg notes that commercial tenants today prefer new buildings with all the best amenities. Many of the federal buildings are old structures that Peters says are in dire need of repair.
“The deferred maintenance is reflected in the condition of these buildings,” he said. “You know, if you toured many of them, you wouldn’t want to be there with your dog, much less with your work environment.”
The commercial real estate market is in the toilet right now, so it's not likely that many of those buildings will sell anytime soon. Once interest rates come down, many of these office buildings are in prime locations and would be a good investment for a company wanting to expand.
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