Since the end of 2012, the United States General Services Administration (GSA) has been actively working to reduce the size of its leased footprint.  At its peak in December 2012, GSA leased 198.6 million square feet of space (MSF) across the United States. As of yearend 2023, the agency had shed almost 21 MSF of leased space. 

This downsizing has been felt in markets across the United States, but it is particularly drastic in the Washington, DC metro area (GSA’s National Capital Region).  In fact, the GSA-leased inventory in the Washington-Arlington-Alexandria MSA has declined from 58.9 MSF to 46.6 MSF, a 12.3 MSF reduction.  The National Capital Region accounts for approximately 59% of the total downsizing nationally. 

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It’s not a surprise Washington, DC has endured the brunt of the federal government’s reduced footprint. The existence of so much federal space in the nation’s capital has made it easier for GSA to shift agencies and consolidate leases into federally owned buildings.

Similar dynamics are playing out on a much smaller scale in markets like Atlanta, Chicago and Denver that house regional concentrations of federal space. Cutting against the trend is Kansas City, where the federal government closed its Bannister Federal Complex (an owned facility) and relocated both the National Nuclear Security Administration (1.5M RSF) and GSA’s regional offices (151,000 RSF) to leased space.

Since the COVID-19 pandemic, GSA’s goal to reduce its leased real estate inventory has accelerated because large segments of the federal workforce have fully embraced telework and are still operating from home. While telework policies within the Federal Government have been enacted throughout most of the nation, Washington, DC has proven itself particularly vulnerable to the effects of low office utilization. As shown by recent studies such as the Government Accountability Office’s July 13, 2023 report (Federal Real Property: Preliminary Results Show Federal Buildings Remain Underutilized Due to Longstanding Challenges and Increased Telework | U.S. GAO), GSA’s real estate portfolio is underutilized and in recent months, this has gained Congressional attention. In the recently passed Fiscal Year 2024 spending budget, Congress included reporting requirements for agencies to provide more information about federal office space utilization rates.

The concentration of federally owned space and the Government’s heightened focus on reducing its leased footprint suggests that this trend is unlikely to change in the near-term.