- DOGE has cut 2.3M SF of federal office leases, saving $145M as part of its cost-cutting efforts.
- The Department of Labor (845K SF), National Archives (125K SF), and Department of Health and Human Services (120K SF) saw the most cuts, totaling $9.2M in savings.
- The DHS Office of the Undersecretary for Management in Washington, DC, achieved the highest cost savings at $13.9M.
- GSA, which manages 363M SF of federal space, has been ordered to terminate 7.5Kleases at a rate of 300 per day.
- DOGE’s broader cost-cutting measures, including lease renegotiations, fraud detection, and asset sales, have saved an estimated $55B.
The Department of Government Efficiency (DOGE) has terminated 2.3M SF of federal office leases, saving $145M in real estate costs, per GlobeSt.
Big Cuts Underway
The Department of Government Efficiency (DOGE) has aggressively cut 2.3M SF of federal office leases in just a few weeks, a move to reduce government spending.
These terminations have resulted in $145M in savings, with agencies either consolidating into federally owned space or closing offices altogether.
The most significant reductions in square footage have impacted the Department of Labor (845K SF), the National Archives (125K SF), and the Department of Health and Human Services (120K SF), collectively saving $9.2M.
However, by cost savings, the largest reductions came from the DHS Office of the Undersecretary for Management in Washington, DC ($13.9M), as well as lease terminations in Arlington, VA ($13M) and Washington, DC ($12.7M).
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More Cuts Incoming
The CRE sector has closely followed DOGE’s efforts, particularly its focus on the General Services Administration (GSA), which oversees federal leases and real estate contracts.
As of Fall 2024, GSA managed over 363M SF in nearly 8.4K buildings nationwide. Reports indicate agency managers have been instructed to terminate approximately 7.5K leases at a pace of 300 per day.
DOGE’s broader cost-cutting initiative extends beyond real estate, encompassing fraud detection, asset sales, grant cancellations, and workforce reductions. In total, these efforts have reportedly saved the government an estimated $55B.
Looking Ahead
With government downsizing efforts accelerating, the office sector faces increasing vacancies as federal tenants exit leased properties.
Investors and landlords who rely on government tenants may need to pivot strategies as DOGE’s aggressive cost-cutting continues to reshape federal office space demand.
