The US government will vacate nearly 800 federal offices across the country as part of a drastic cost-cutting initiative led by Elon Musk’s Department of Government Efficiency.
Internal documents from General Services Administration (GSA), reveal that hundreds lease cancellations will be in effect by mid-year. This will force agencies to relocate, downsize or negotiate new terms.
The move is expected to save the government approximately $500 million, but it has raised concerns about the disruption of essential public services.
The agencies affected include the Internal Revenue Service, the Social Security Administration and lesser-known but vital offices like the Railroad Retirement Board and Bureau of Reclamation.
The sheer volume of lease terminations has caused concern among lawmakers, agency officials, and landlords. They fear that the rushed process could cause logistical problems and affect critical services.
Some agencies have already reacted to the decision by arguing that they cannot easily relocate or downsize their operations.
IRS, SSA and other federal agencies are targeted by massive lease terminations
The GSA has officially informed landlords of 793 lease cancellations. Priority was given to offices where cancellations could be made within a few months without penalty.
This is one of the largest real estate reductions ever in US history, and it affects a wide range of agencies.
The IRS alone will lose dozens taxpayer assistance centers, which could impact services for individuals who need help with tax returns and refunds.
The SSA is also facing significant office closures.
Other affected agencies include Bureau of Reclamation which manages water supply across the drought-prone Western US and the Railroad Retirement Board which provides financial benefits for railroad workers and their family members.
Some agencies may be forced to consolidate their offices, while others will try to extend their leases and/or shift to remote operations.
The rapid pace of cancellations, despite the potential savings, has been criticized.
Some internal government sources indicate that some lease terminations have been announced in error, and then quietly rescinded.
The updated DOGE list, however, still includes newly added cancellations of leases, indicating that the full extent is still evolving.
Landlords push back as federal agencies scramble to minimize disruptions
Many landlords were blindsided by the sweeping cuts. They had relied on long-term leases with the government, which are a stable investment.
The disorganized nature of this process was highlighted by the fact that some agency officials were not aware of the cancellations before being notified by the building managers.
Experts in the industry predict that many agencies may struggle to vacate their offices on time, which could lead to rent payments being held over and undermine DOGE’s cost saving goals.
Concerns have been raised as to how agencies will manage this transition. Some offices may move, but others will have no choice but to close.
One of the locations that could lose its lease is an IRS taxpayer assistance center in Arizona. This centre helps low-income individuals to file their taxes.
Some employees and the public are uncertain about future government services due to the prospect of office closings without clear relocation plans.
The Building Owners and Managers Association (BOMA), which represents commercial landlords, has warned property owners to prepare for legal action in order to recover losses should government agencies fail vacate their properties on time.
DOGE has also been urged by several lawmakers to reconsider or delay certain closings, especially those that affect rural areas with limited service options.
Government cost-cutting plan raises questions over long-term savings
The estimated savings of $500 million over the next ten years is disputed by critics who claim that the economic impact on the economy as a whole remains uncertain.
The anticipated savings could be offset by costs associated with moving agencies, renegotiating rents, or paying for holdover rental.
The move is a part of a larger effort to reduce federal government real estate footprint. This initiative began before Musk’s involvement, but has now been dramatically accelerated.
Congress had already passed legislation requiring federal agencies assess office occupancy rates. Guidelines suggest that leases should be terminated when usage falls below 60%.
Many of the offices that are closing offer in-person services which cannot be easily transferred to online or consolidated.
David Marroni, a Government Accountability Office official, supported the idea to reduce excess government office space at a recent hearing in Congress. However, he warned that such efforts should be carefully planned.
While some agencies are looking for ways to minimise disruptions, others are left in limbo while the lease termination process unfolds.
In the coming months, the true impact of these reductions will be evident as affected offices prepare for closure, relocation, or to push back against the decision.
This post US Government to Vacate 793 Offices as Elon Musk’s DOGE Cuts Real Estate Costs may be modified based on updates.
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