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Trump’s Complicated Effect on the Office Market
Tuesday, February 11, 2025
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Desk Dump: Trump’s return-to-office mandate and federal downsizing could flood the market with vacancies, impacting office landlords, especially in government-heavy areas.
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President Trump has issued a flurry of executive orders since taking office, some potentially affecting the stalled return of public and private workers to offices. Last month, his administration introduced this action: “Heads of all departments and agencies in the executive branch of Government shall, as soon as practicable, take all necessary steps to terminate remote work arrangements and require employees to return to work in-person at their respective duty stations on a full-time basis, provided that the department and agency heads shall make exemptions they deem necessary.”
On February 10th, the federal employee return-to-work order took effect, disrupting schedules for many federal workers and causing traffic issues in cities like Washington, D.C. Beyond the inconvenience, it may set a precedent for the rest of the country, where remote workers have grown accustomed to working from home while employers push for a return to the office for various reasons.
The federal return-to-office mandate is expected to strengthen the push to restore pre-pandemic office occupancy levels. But, at the same time, Trump’s Department of Government Affairs, led by Elon Musk, is aggressively working to cut federal spending—particularly by reducing government office leases.
Commissioner of Public Buildings Services Michael Peters stated that the agency aims to sell buildings or terminate leases covering about half of the federal government’s office space. This effort is already raising concerns among landlords, especially in areas with a high concentration of federal employees.
Compounding the downsizing, Trump is offering federal employees buyouts to further shrink the government’s office footprint. So far, around 65,000 employees—nearly 3% of the federal workforce—have agreed to leave. But, implementing the plan won’t be as straightforward as offloading empty buildings. This week, a judge delayed the deadline for employees to make this “fork in the road” decision until further notice.
Trump remains steadfast in his goal of reducing the size and cost of the federal government. His actions in the coming months and years could reshape the business world’s stance on remote work while also flooding the market with vacant office space. Whether that’s a good or bad thing depends on your perspective—or your office portfolio.
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Overheard
So damn sick of tech-ish companies lobbying state governments to change laws to force other companies to use their services.
(This is why security deposits are limited to one month and landlords are required to report rent payments to credit bureaus now in CA.)
— Moses Kagan (@moseskagan)
2:43 PM • Feb 10, 2025
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