After two months marked by the Trump administration canceling hundreds of federal office leases, it has now signed its first major lease deal: a 403K SF renewal for the Department of Justice in D.C.
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The DOJ signed the lease renewal at Two Constitution Square in NoMa, a building owned by Northwestern Mutual. The department has occupied the building since 2010, and the new lease represents a 30% reduction from its current full-building lease, which totals 575K SF.
The lease award was posted Monday on the government's contracting solicitation website, which shows the value of the deal is $243M. It has a 15-year term with an additional five-year option.
This appears to be the largest lease the federal government has signed nationally since the start of President Donald Trump's second term, multiple government leasing brokers said.
“In the GSA world, getting anything done is difficult and time-consuming, particularly given the transition and the GSA thinking and rethinking every move that it makes,” said Cushman & Wakefield Executive Vice Chair Darian LeBlanc, who leads the firm's government leasing group and represented the landlord in this deal.
A spokesperson for the General Services Administration said the deal is part of the Trump administration's efforts to optimize the federal footprint.
“GSA is working closely with our customer agencies to ensure the best possible workplace solutions are achieved; in this case to support the Department of Justice’s important mission,” the spokesperson said.
The Two Constitution Square building at 145 N St. NE was developed specifically for the DOJ in 2010. Stonebridge constructed the building and sold it to Northwestern Mutual when it was complete but still manages the property.
“We're really excited about this,” Stonebridge principal Doug Firstenberg said Tuesday. “We've worked hard to make this extension happen. The GSA and DOJ’s program has changed. Their goal is to be more efficient. This obviously represents them achieving that.”
The DOJ is planning to reorganize into the reduced footprint over the next 18 months. And the ownership will take that time to begin searching for a tenant to take the newly vacant 172K SF, representing 30% of the building.
Firstenberg said the most fitting replacement would be another federal tenant and that the management team will be looking at other agencies with upcoming lease expirations.
“It’s a building that was designed and planned to meet the needs of the federal government,” he said. “So obviously, we’ll be looking at some of the agencies where their missions and their programming has changed and need new space.”
The GSA put out a solicitation in May 2023, under the Biden administration, seeking between 342K SF and 410K SF for the DOJ. The House approved the spending in the winter of 2023, and the Senate followed last fall.
Cushman & Wakefield's LeBlanc and Scott Killie represented the landlord, while CBRE's Henry Chapman and Richard Downey represented the government. Sean McNeal was the GSA contracting officer on the deal.
The Trump administration has been cutting leased space in its push to downsize the federal government's real estate portfolio. Spearheaded by Elon Musk's Department of Government Efficiency, the government had terminated 653 leases totaling 7.5M SF across the country as of April 15, according to JLL's tracker.
