This summer, federal agencies are set to vacate numerous offices nationwide as part of a hasty and error-prone initiative spearheaded by Elon Musk’s budget-cutting advisors, aimed at terminating leases deemed wasteful.
The White House’s Department of Government Efficiency (DOGE), led by Musk, hosts an online registry of canceled real estate leases. However, internal documents acquired by The Associated Press reveal a significant detail: the anticipated effectiveness dates for these cancellations. Documents from the General Services Administration (GSA), which manages U.S. government real estate, indicate that numerous federal office and building leases are expected to terminate by June 30, with many more set to follow in the months ahead.
The swift elimination of leases has raised concerns, prompting several lawmakers and agencies to urge DOGE to exempt certain properties. Notably, the IRS, Social Security Administration, U.S. Department of Agriculture, and U.S. Geological Survey are among those facing 20 or more lease cancellations.
Many of the affected terminations involve lesser-known agencies that provide essential services to numerous Americans.
The agencies range from a Bureau of Reclamation office in Boise, Idaho—overseeing water supply and conflict resolution in the often-arid Western U.S.—to a Joliet, Illinois, branch of the Railroad Retirement Board, which administers benefits for railroad workers and their dependents.
It’s important to note that the lease terminations don’t necessarily mean that all locations will cease operations. Agencies might negotiate new leases to remain, downsize their spaces, or relocate entirely.
“Some agencies are insisting: ‘We cannot leave,'” said Chad Becker, a former GSA real estate official now representing building owners with government leases at Arco Real Estate Solutions. “There will likely be a phase of resistance followed by realization, and if required, they may commence preparations for relocation.”
DOGE has recently informed landlords that it intends to terminate 793 leases, primarily targeting those that can be rescinded without penalty within months. The group anticipates these actions will save approximately $500 million over the leases’ terms, some of which were set to extend into the 2030s. For instance, the cancellation of the Bureau of Reclamation lease in Boise is projected to take effect on August 31, saving an estimated $18.7 million through 2035.
However, DOGE’s projected savings—a small portion of Musk’s ambitious $1 trillion cost-reduction goal—have not been independently verified and do not account for relocation and closure expenses. The agency has not provided details on how these changes will impact affected agencies.
“My initial response is that this will likely lead to greater disorder,” remarked Jim Simpson, an accountant in Arizona who assists low-income individuals with tax filing and serves on an IRS advisory panel. “While there’s room for improvements in government efficiency, they should be implemented strategically, not arbitrarily.”
Simpson expressed his shock upon discovering that multiple IRS offices, including local taxpayer assistance centers, were facing canceled leases. He guides clients to these locations for essential paperwork and IRS support, and he emphasized that losing these services would lead to “significant anxiety” and delays in refunds.
DOGE cancels some lease cancellations due to errors
Some planned lease cancellations at IRS centers and other sites were mistakenly identified and have since been rescinded, according to a source familiar with the adjustments who spoke to the AP anonymously to avoid retaliation. These updates have not been incorporated into DOGE’s list, which only recently altered the status of one lease while adding numerous others.
For example, the GSA reversed the cancellation of a Geological Survey office in Anchorage, Alaska, upon discovering it lacked the authority to terminate the lease, as per the informed source.
Representative Tom Cole, R-Okla., stated Monday that he had persuaded DOGE to retract lease cancellations targeted at the National Weather Center in Norman, a Social Security office in Lawton, and the Indian Health Services office in Oklahoma City. Nonetheless, as of Thursday, all three leases still appeared on DOGE’s cancellation list.
The GSA’s press office did not reply to inquiries.
DOGE push took many by surprise
Although there was already bipartisan momentum toward reducing the government’s real estate holdings, the mass cancellations caught a traditionally stable industry off guard.
Landlords who anticipated that government agencies would remain tenants for several more years were left shocked. Some agencies learned of their lease cancellations through building managers rather than their federal partners, according to real estate experts.
Some cancellations could incur additional costs
Becker, whose firm monitors the DOGE lease cancellations, along with industry observers, predict that some agencies may struggle to relocate their staff and assets within such constrained timelines. This could compel agencies to incur extra rent during what is known as a holdover period, thereby negating DOGE’s stated intention of saving taxpayer funds.
The Building Owners and Managers Association, which represents the commercial real estate sector, recently alerted landlords to prepare for seeking payment from federal tenants who remain past their lease expiration dates.
When asked about their plans for soon-to-expire leases, the IRS did not provide a response. A spokesperson for the Social Security Administration downplayed the impact of office lease losses, noting that many were “small remote hearing sites” that did not serve the public, were already being consolidated, or were scheduled for closure.
Several other agencies offered little clarity, stating they were collaborating with the GSA to assess their options, with some comments being nearly identical.
However, a spokesperson for the Railroad Retirement Board expressed concern regarding the impending lease cancellations of their offices in Joliet, Illinois, and eight other states, emphasizing their commitment to “maintain a public-facing office presence for the local railroad community.”
Trimming federal real estate was already in progress
David Marroni, an official from the Government Accountability Office, announced during a congressional hearing last week that the initiative to offload unnecessary federal real estate is “long overdue,” pointing out that agencies have retained excessive space for too long. Nonetheless, he cautioned that such downsizing must be deliberate and meticulously planned to “generate significant savings and reduce the risk of errors and unintentional impacts on mission effectiveness.”
This process had commenced prior to Musk’s intervention, with the federal government’s real estate portfolio declining steadily over the last decade. Indeed, critics of DOGE argue that if the agency were genuinely committed to cost-cutting, it could learn from the GSA, which has long aimed to provide “effective and efficient” services to the American public.
A law enacted by former President Joe Biden before his departure in January mandated that agencies assess the actual occupancy rates of leased spaces by summer. Agencies falling below a target occupancy rate of 60% over time would be directed to dispose of their excess space.
“There is a sensible and orderly approach to achieve this,” Representative Greg Stanton, an Arizona Democrat, commented during last week’s hearing. He expressed concern that DOGE’s reckless methodology threatens to compromise the quality of public services.
Industry experts have cautioned that each situation is unique, and it may take months or even years to fully grasp the implications of the lease cancellations.
“It truly hinges on the specific terms. Yet, it is undeniably shocking that, all of a sudden, within six weeks, these developments have transpired,” stated J. Reid Cummings, a finance and real estate professor at the University of South Alabama. “It’s akin to a blitzkrieg.”
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