The federal government is extending its real estate offloading streak with plans to sell the U.S. Department of Agriculture's flagship office hub on the National Mall in Washington, D.C., as part of an effort to save nearly $1.6 billion in maintenance expenses.
The General Services Administration, the agency responsible for leasing and managing government buildings, made public its plans to dump the department's South Building at 1400 Independence Ave. SW and relocate its employees to other locations across the country before the end of the year.
The disposition plans fit into the administration's strategy of targeting properties with escalating maintenance expenses and low occupancy rates in order to cut down on its real estate obligations.
"At one time, the South Building was the beating heart of USDA, but today it is a shell of what it once was," Agriculture Secretary Brooke Rollins said in a statement, adding the department will turn over the 2.1 million-square-foot property for the GSA to market and sell. "If you were to walk in the South Building today, here's what you would find: empty office, after empty office, after empty office."
Even after the government has invested heavily in capital improvements, the building still faces about $1.6 billion in "delinquent maintenance," according to the GSA.
The flagship USDA property was constructed in the 1930s and, along with the neighboring Jamie L. Whitten Federal Building facing the National Mall, makes up the department's headquarters. USDA officials did not provide details as to where employees currently housed in the South Building will go as part of an ongoing agency reorganization.
The department released plans last year to relocate more than half of its D.C.-area employees to USDA hubs in North Carolina, Missouri, Indiana, Colorado and Utah.
Up for grabs
Yet that workforce is far smaller compared to just a year ago, as thousands of USDA employees have taken buyouts and left the department throughout President Donald Trump's ongoing effort to reshape and reduce the size and footprint of the federal government.
The USDA's South Building is the single largest liability in the GSA's real estate portfolio, Administrator Edward Forst said.
"The president has set a bold agenda to shrink the federal real estate footprint and transform what was once a fiscal drain of empty space into an engine of economic opportunity, and this is GSA's mission," Forst said of taxpayers carrying a billion-dollar liability for the building, which is now more than 85% vacant.
The USDA's push to better align its workforce and real estate needs makes it one of several government bodies looking to shed its office space.
The Department of Housing and Urban Development is planning to move out of its downtown D.C. headquarters and take over the National Science Foundation's Alexandria, Virginia, headquarters.
The Internal Revenue Service is also looking to shed space from its office portfolio that is now underused, following more than a quarter of its employees leaving or retiring from the agency last year.
The Public Buildings Reform Board, a bipartisan panel that advises the GSA on buildings it should sell, told lawmakers last year that the agency would need about $50 billion to fully address its extensive repair and upkeep backlog. Members of the board said GSA cannot realistically expect Congress to provide that level of funding, and that it needs to offload buildings it owns but cannot afford to maintain.
Some properties that have been added to the GSA's for-sale list in Washington include the Department of Energy's 1.7 million-square-foot James V. Forrestal Building; the Wilbur J. Cohen Building that previously housed the Social Security Administration; the GSA's 845,000-square-foot regional office building; and HUD's former 1.1 million-square-foot headquarters.
No deals have yet been announced.