DOGE’s List Of Terminated Leases Climbs To 748, But Legal Fights Loom
The number of leases terminated by President Donald Trump’s administration has swelled to more than 700, or roughly one in 10 of the federal government's office spaces.
The Department of Government Efficiency, the nongovernmental agency spearheaded by Elon Musk that has been tasked by Trump with slashing federal expenses, added more than 500 leases to its list of terminated deals in recent days.
DOGE says it has now terminated 748 leases totaling 9.6M SF as of Monday morning, generating $660M in savings. They span all 50 states and double the total square footage targeted for termination just a week earlier. But the cancellations could face pushback, including legal challenges from landlords.
The General Services Administration, which oversees the federal government’s real estate portfolio, is looking to eliminate around 1,000 leases that are near the end of their initial term but have a renewal option, known as the lease’s soft term, Federal News Network reported last week.
Of the leases targeted by DOGE, 615, or 89%, had reached the end of their soft term, according to analysis from CoStar. Only 22 leases totaling 544K SF had reached the contract's full expiration date, and the remaining 18% of deals were not at or near the soft term.
Like any other tenant, the federal government would be legally obligated to continue paying rent at properties that have a valid lease even if they vacate the space. But Musk, the world’s richest man, has a history of ignoring court orders and contractual obligations concerning real estate.
Columbia Property Trust sued X in late 2022 for roughly $136K in unpaid rent that Musk withheld after buying the social media platform. Prominent developer Jamestown also took Musk’s website to court in 2023 for roughly $1M in back rent and to force the company to vacate its Atlanta office.
Tom Cafferty, president of Cafferty Commercial Real Estate Services, told the Washington Business Journal Monday that he had received a termination notice from the GSA for a 35K SF lease that can’t legally be ended until at least 2029.
The office space at 5301 Shawnee Road in the Washington, D.C., area is leased by the U.S. National Technical Information Service, and the GSA letter said the agency will vacate by Sept. 30. Cafferty told the WBJ he thought the lease termination was likely a clerical error, but he’s been unable to reach anyone at the GSA or DOGE to dispute the plan.
The GSA has targeted roughly 13% of its 7,500-lease portfolio for elimination and as much as 60% of the agency's workforce for layoffs, a GSA insider told FNN. The leases it says it plans to terminate account for roughly 5.4% of the federal government’s office footprint, according to JLL.
Multiple law firms have put out statements calling any move to cancel a federal lease that isn’t at its soft term illegal and urging any impacted landlords to contact their lawyers to push back in court.
“The government has been sending out a number of lease terminations that appear to be auto-generated and that are mistakenly seeking to terminate leases that are in the firm term,” law firm Holland & Knight advised clients in an email. “The government does not have the right to terminate in the firm term. Lessors who receive notices that purport to terminate leases in the firm term should immediately engage counsel and push back on these notices.”
The scope of the space-cutting measures has also faced scrutiny. DOGE’s website hosts a so-called “Wall of Receipts” that Musk has committed to updating twice a week with the latest programs, leases and agencies it has identified for elimination. A Bisnow analysis of the leases found several purported new savings were leases that had already been terminated or were part of ongoing consolidation efforts.
DOGE has deleted hundreds of cost-savings claims in recent weeks as the details of the contracts are scrutinized. Last week, it erased its five largest savings initiatives, and over the weekend more than 1,000 entries on the Wall of Receipts were removed or altered.
The total cost savings reported by DOGE have gone from $16B to $9B as erroneous entries are updated or removed, The New York Times reported.
