In an aging, empty federal office building in Washington, D.C., members of Congress argued over the best approach to manage the government’s large real estate portfolio as a watchdog agency said new data is expected to be collected this year that could assist in major decisions on the properties.
The House Oversight Committee’s subcommittee on Delivering on Government Efficiency, or DOGE, met Tuesday in an auditorium at the Wilbur J. Cohen Federal Building at 330 Independence Ave. SW, a government-owned property that was ordered to be sold via a bill signed into law by then-President Joe Biden this year. The panel has the same acronym, DOGE, as the Department of Government Efficiency, the cost-cutting agency taking direction from billionaire Elon Musk, tasked by President Donald Trump to slash government waste and eliminate fraud and abuse.
Lawmakers on opposite sides of the aisle voiced strikingly different opinions on a strategy for federal properties in the hearing held at the building that until recently served as the home of the Voice of America media network.
“American taxpayers have been drowning in debt, inflation, unaffordable grocery prices, high interest rates and have been suffering to get by all while the federal government is pouring billions of dollars into wasteful, empty office buildings,” Republican U.S. Rep. Marjorie Taylor Greene from Georgia said during the hearing. She serves as the subcommittee chair.
The top Democrat on the subcommittee, U.S. Rep. Melanie Stansbury from New Mexico, recommended a more scrupulous process moving forward. She said that while reviewing the management and inventory of the federal property is not new, she was concerned the Trump administration's faster approach would not be for the benefit of most American taxpayers.
So far, under Trump, the government has sought to terminate nearly 700 agency leases across the country and has posted, but later removed from public view, a list of more than 400 government-owned buildings it says it is considering for disposal. It has since started posting assets it is considering for accelerated disposition.
Data utilization critical
Lawmakers debated whether the Trump administration’s accelerated strategy to reduce the federal office footprint by canceling leases and identifying government-owned properties for sale is savvy or short-sighted. Real estate professionals at the hearing said building utilization data is expected to be collected beginning this summer that could offer important details for deciding what to do with the properties.
“Agencies are supposed to start collecting that data in July, and then they’re supposed to report in January,” David Marroni, director of physical infrastructure at federal watchdog agency Government Accountability Office, said during the hearing. Plans to collect that data are in response to the bill Biden signed into law earlier this year.
Having more reliable knowledge about government properties and how they’re utilized and how often could help the government seek efficiency with taxpayer dollars, said David Tarter, executive director for the Center for Real Estate Entrepreneurship and Master’s in Real Estate Development Program at Virginia's George Mason University just outside the nation’s capital.
He made the comments in an interview with CoStar News, and he didn't attend the hearing. "More information is better, it allows you to make better decisions,” he said.
In fact, the GAO issued a report Tuesday recommending the General Services Administration, the agency that manages government property, implement actions for greater data reliability. The GSA did not immediately respond to a request to comment.
In the meantime, the GAO’s Marroni warned that while shedding underused properties can be a positive and the momentum Trump created in his effort to reduce the federal property footprint has disrupted existing inertia, deliberate planning is imperative. Moving too quickly could create financial risk, in part, because several federal buildings have active tenants that could be costly to relocate.
Other experts agreed getting rid of some properties is not entirely a net negative, but that it's important to follow a judicious process while doing so.
"Selling into a down market is not a sagacious plan,” said Ron Kendall with the National Federal Development Association during the hearing. The association represents owners and developers of real estate leased to the federal government.
“That’s a kind of fire-sale approach," said Kendall, who works for Carpenter/Robbins Commercial Real Estate. "You’re going to get the lowest price possible, if you can move the assets at all. You’re loading up a market that is already under distress, so it is cataclysmic.”
The Washington-area office market vacancy rate is at 17.1%, an all-time high, and the overall availability rate stands at 19.8%, according to a CoStar Market Analytics report.