The General Services Administration (GSA) is intensifying efforts to sell or dispose of federal office space that agencies no longer need, reflecting a significant shift in federal real estate strategy driven largely by increased telework.
In 2023, federal building utilization rates in the Washington, D.C. metro area remained approximately 30% lower than pre-pandemic levels. To address this, the GSA added 23 federal buildings to its sale and disposal process. Elliot Doomes, commissioner of GSA’s Public Buildings Service, stated that the GSA is working on another list of federal properties to start offloading in fiscal 2025. “These are assets that we just don’t need,” Doomes said during a webinar on the future of federal real estate hosted by BisNow Media.
Over the last four fiscal years, the GSA has reduced its footprint by almost 8 million square feet, and over half of its 8,000 leases are coming up for renewal in the next five years. This trend is expected to continue, with most agencies likely not renewing their leases at the same footprint they currently have.
The Government Accountability Office (GAO) found that all agency headquarters buildings in the Washington, D.C. area had excess space, with 17 buildings averaging just 25% utilization. Doomes expressed concern over these findings and emphasized that the GSA is conducting a detailed review of its owned portfolio to identify properties that agencies no longer need and which have significant deferred liabilities. The focus is on disposing of assets that are unlikely to see an increase in demand for space from federal workers.
Experts predict that the GSA will continue to consolidate the federal real estate portfolio regardless of the next administration, but the methods will vary depending on the winner of the presidential election. The Biden administration is requiring federal employees to return to the office about 50% of the time, although implementation of this policy varies by agency. This approach aims to balance the benefits of telework with the need for in-person collaboration and productivity.
If current Vice President Kamala Harris becomes president, the emphasis on telework and office space reduction may persist. However, if former President Trump were to be reelected, it is anticipated that there would be a push for even greater in-person attendance, potentially altering the current trajectory of federal real estate downsizing.
It’s unfortunate that the issue of federal employee telework has become a political battleground this election year. House Oversight Chairman James Comer (R-Ky.) accused the Biden administration of using extensive telework to secure votes, claiming it prioritizes political gain over productivity and cost-effectiveness. Comer demands data to justify these policies, suggesting the administration’s motives are politically driven.
Contrary to Comer’s claims, data from the White House Office of Personnel Management shows substantial benefits of telework, including higher retention and engagement rates. For instance, 68% of frequent remote workers intend to stay in their roles compared to 53% of non-teleworkers, and 77% of teleworkers report high engagement levels versus 59% of office-bound employees. Additionally, over 84% of employees and managers acknowledge improved work quality and customer satisfaction.
Despite these advantages and legislative support, the political debate continues. Comer’s criticisms reflect a broader contention about the future of telework in federal operations. Decisions about workplace policies should be evidence-based, aiming to optimize productivity, engagement, morale, retention, and recruitment. Politicizing these issues risks undermining these goals and creating a less effective federal workforce.
Interestingly, Dan Mathews, who served as PBS commissioner during the Trump administration, noted that a new Trump administration would likely consolidate the GSA’s portfolio of owned buildings by shifting more agencies to lease office space. This approach was previously used to quickly and cost-effectively vacate properties. Mathews added that during the Trump administration, the focus was on moving tenants out of federal buildings and putting them in leases to expedite property disposal and manage costs better.
The Heritage Foundation’s Project 2025, a policy blueprint crafted by former Trump administration officials, acknowledges the widespread adoption of telework but calls for a critical evaluation of where hybrid and remote work is beneficial versus where in-person collaboration is essential. This document suggests that some telework policies may undermine organizational cohesion and accountability.
The transition also raises questions about the future of urban centers that have historically relied on federal buildings and employees to drive local economies. Cities like Washington, D.C., and others with significant federal presence face potential economic disruptions as federal office spaces are vacated and surrounding businesses lose a key customer base. Trump himself has proposed relocating federal employees out of the D.C. metro area, moving up to 100,000 government positions to other parts of the country.
The GSA owns 36.7 million square feet of building space in the National Capital Region, with about 2 million square feet currently vacant. The agency is seeking full access to the Federal Buildings Fund to accelerate efforts to dispose of older buildings and consolidate office space. However, funding has been a significant challenge, with Congress diverting about $1 billion annually from the Federal Buildings Fund since 2011. This diversion has delayed investments in federal buildings and limited opportunities for agencies to consolidate office space.
The necessity to downsize federal real estate in response to increased telework is clear, but the path forward requires careful consideration and strategic planning. The GSA’s efforts to shed underutilized office space will continue, but the methods and pace of these efforts may vary depending on the next administration. By adopting a flexible, hybrid approach and investing in technology and support systems, the federal government can navigate this transition effectively, ensuring long-term success and sustainability in its real estate strategy. The key is to use a data-based approach that recognizes the benefits of teleworking and uses it to improve federal employee retention and engagement, along with work quality and satisfaction.
