A U.S. government real estate portfolio needs an estimated $50 billion in deferred maintenance and repairs as calls to streamline property holdings grow.
A Congress-appointed panel identified the liabilities in a report that calls for shrinking assets as the answer to a growing list of needed upkeep. The Public Buildings Reform Board said the General Services Administration, the government’s real estate manager, received funds over decades for maintenance and repairs equivalent to about 0.375% of the portfolio’s functional replacement value. Industry standards recommend a rate of 2% to 4%, it said.
As a result of this chronic underfunding, the government’s property portfolio is left “with deferred maintenance backlogs that increase building lifecycle costs, accelerate asset deterioration, and degrade facility performance,” according to the report. The rising costs are crippling agencies’ ability to deliver on their missions and endangering the health and safety of the federal workforce, it found.
“If $50 billion rained from the sky today, we’d be back where we are in a decade because there’s no appropriation to maintain them,” Darian LeBlanc, an executive vice chairman and director of government services for Cushman & Wakefield, told CoStar News.
The report comes as President Donald Trump’s administration said it wants to lower government spending on real estate. Soon after he took office last year, Trump instructed the Department of Government Efficiency to dramatically cut U.S. government spending by slashing leases.
In December, it was revealed in testimony to the House Subcommittee on Economic Development, Public Buildings, and Emergency Management that the government had terminated or plans to terminate 260 leases, well below the initial goal of canceling at least 700 federal leases. The GSA estimates those actions will result in $112 million in annual cost savings.
Group advocates for dispositions
The Reform Board offered recommendations to deal with a maintenance-and-repair backlog at more than twice the highest amount previously estimated by GSA. A GSA spokesperson declined to comment on specifics to CoStar News.
The judicial branch of the U.S. government is seeking authority from Congress to directly manage its properties that it said are deteriorating; the GSA now oversees that property.
The Reform Board found that properties aged 31 to 75 years had the highest maintenance costs per square foot and accounted for the largest share of total square footage, making them the most logical candidates to be shed.
Reform Board officials acknowledged deferred maintenance limits the buildings’ attractiveness to prospective buyers, but said the government still needs to part with properties.
“Congress is never going to be able to appropriate its way out of this problem,” said Talmage Hocker, acting chairman of the Reform Board, in a statement. “The only way to handle this is through a radical reduction in the GSA’s portfolio size.”
GSA has been exploring options for shedding older properties. Within the past few weeks, it said it planned to dispose of the Agriculture South building in Washington, D.C., home to the U.S. Department of Agriculture. Offloading the property would save about $1.6 billion in maintenance expenses, the GSA said.
This week, GSA Administrator Ed Forst told a panel of lawmakers that his organization is heavily focused on adjusting the government’s real estate portfolio. However, he also acknowledged that his agency does “not have a grand plan for the disposition” of properties in the nation’s capital, which make up much of the agency’s portfolio.
“We are looking at buildings that are not needed, and we’re trying to be more expeditious about realizing return on those and moving the people out of underutilized real estate,” he said.
Judiciary needs billions for repairs
At the end of last month, the judiciary sent a letter to lawmakers with its request for management authority, saying that for more than a decade, buildings owned by GSA that house the judiciary have accumulated a growing backlog of $8.3 billion worth of critical repairs.
For example, at the Everett McKinley Dirksen federal courthouse in Chicago, a valve on a water pipe failed in October 2024, causing damage on six floors, according to a statement from the U.S. Courts. To date, construction has not begun, and one courtroom remains closed nearly 18 months after the original leak.
The judiciary occupies 396 government-owned buildings and 379 leased spaces, with facilities in every state and territory, the U.S. Courts noted. Buildings owned by GSA account for more than 80% of the federal court systems’ space portfolio, and the judiciary currently is paying annual rent of $1.3 billion to GSA.
According to a background paper sent to Congress, the proposed transition would be gradual and start with properties in no more than 10 judicial districts.
“I do think they’re naive," Forst told lawmakers. “I think they’re uninformed, and I think they’re ill equipped to go and manage this as they suggest.”
Cushman’s LeBlanc said he agreed with the GSA administrator’s sentiment, noting that decentralizing real estate responsibility would compound existing problems.