The Trump administration over the weekend further accelerated its pace of commercial real estate lease terminations for federal agencies, spreading the scrapped agreements to all 50 states.
Since Friday, the Department of Government Efficiency has added more than 500 lease terminations to its total. That's about one in 10 active federal commercial real estate leases canceled, according to CoStar News analysis, and double what DOGE had previously publicly listed.
The fast-changing nature of the initiative shows how the administration is pushing to cut expenses and release more federal agencies from rental agreements. The canceled leases are not only hitting owners but also service providers across the country including appraisers and lenders who are busy trying to determine the impact on their markets and portfolios.
Lease terminations have now spread to all 50 states, including land reserved for American Indian tribes, and all U.S. territories except for America Samoa.
DOGE updated its website early Monday showing 748 lease terminations totaling roughly 9.6 million square feet and about $660 million in lease savings.
CoStar News could directly match the DOGE list to 694 leases on a full list of federal government property agreements released by the General Services Administration in January. That was the last posted list of active leases by the GSA, which acts as the government's landlord overseeing leasing for most but not all federal agencies.
DOGE’s latest list shows it has terminated about 10% of the active number of leases on the GSA list. DOGE is a newly created federal operation led by tech billionaire Elon Musk that was established when President Donald Trump took office in January. The White House did not respond to an emailed request to comment from CoStar News on the latest lease terminations.
‘Chaos, not logic’
“One of the primary issues is that GSA/DOGE's chosen order of operations presents as chaos, not logic,” Chad Becker, a principal at Colorado-based brokerage Arco Real Estate Solutions, told CoStar News via email. “We would like to believe that those making decisions at GSA/DOGE are approaching this from a thoughtful and logical perspective, but that simply doesn't appear to be the case.”
DOGE has initially been targeting primarily federal commercial real estate leases that have reached their lease termination rights date, the point when the federal government has the right to end the lease agreement. It's different from the lease expiration date that simply marks the end of the agreed-upon term.
Of the listed terminations, 615, or 89%, had reached their termination date, according to the combined analysis of the DOGE and GSA data. However, only 22 of the terminated leases, totaling 544,048 square feet, had reached their lease expiration date.
The remaining leases terminated averaged 12,620 square feet and had an average lease expiration date of November 2027, according to the CoStar News analysis.
The lease with the longest remaining term was for 3,991 square feet at 930 N. Switzer Canyon Drive in Flagstaff, Arizona, running to April 2038. CoStar data shows a federal lease of that size at the property with the National Park Service.
The owner of the property did not immediately respond to a request for comment.
The average lease DOGE has said it terminated had been in place for 10 years, the CoStar News analysis showed. The oldest running lease was for 10,335 square feet at 813 Grandview Ave. in Pawhuska, Oklahoma. The lease had been in place since 1981.
The Bureau of Indian Affairs lists the address as the headquarters for the Osage Agency of the Osage Nation. The BIA did not immediately respond to a request for comment.
Less competition
The acceleration in scrapping office contracts could potentially present new opportunities for work and commissions in the commercial real estate industry.
Becker said that while DOGE’s efforts likely result in greater lease transaction volume for brokerages such as his that specialize in landlord representation work for federal government leases, the situation will ultimately lead to less competition for those deals, greater difficulty in financing them, and ultimately higher rents for the government.
Gordon Griffin, a government contracts attorney in law firm Holland & Knight's Washington, D.C., office, told CoStar News via email his team has heard anecdotal evidence that a number of the terminated leases are for fully utilized spaces.
“Given the broad brush approach to terminating leases, it’s possible that the government will need to negotiate succeeding leases for tenants in these terminated leases,” he added.
As for whether building owners should expect the spaces where DOGE picked a federal lease to end will be used by another government agency, Griffin said trade associations or other groups might already have their eyes on those locations.
“I would think they’d want to get rid of that space entirely, for the most part, because they don’t get credit for saving money if they backfill it and still continue to pay rent,” Lucy Kitchin, managing director of Transwestern's government services advisory group, told CoStar News in a phone interview.