- A House subcommittee is urging the General Services Administration (GSA) to stay on track with federal office space reductions as a January reporting deadline approaches.
- Agencies must submit space utilization data and propose consolidation plans if occupancy falls below 60%, per a new federal law.
- GSA officials say workforce reductions and budget constraints are slowing progress, though 90 buildings were already offloaded in 2025.
- Lawmakers are demanding better transparency, clarity around GSA’s reorganization, and quicker access to disposition funds.
A Tense Check-In
After a year of delays and a fall shutdown, Congress demands answers on federal real estate reduction efforts, reports Bisnow. At a Thursday hearing, lawmakers on a House Transportation and Infrastructure subcommittee questioned top officials. They asked how the agencies plan to meet the next major milestone—a January deadline to report office utilization rates.
Andrew Heller, the new acting commissioner of the GSA’s Public Buildings Service (PBS), testified for the first time. He was joined by Government Accountability Office (GAO) Managing Director Heather Krause and Michael Capuano of the Public Buildings Reform Board.
Reporting Deadline Looms
Under legislation signed in January 2025, agencies with space utilization below 60% must submit a plan to consolidate their footprint. These reports are due next month and are seen as pivotal to unlocking more efficient use—or disposal—of thousands of underused federal properties.
Subcommittee Chair Rep. Scott Perry (R-PA) emphasized urgency: “We want to make sure that the process stays on track.” However, GSA officials noted that the fall shutdown delayed data collection, pushing the release of full agency reports to March.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Transparency And Staffing Shortfalls
Multiple lawmakers raised concerns about transparency and staffing cuts. Rep. Rick Larsen (D-WA) pointed to a sharp drop in PBS employees—from 5,655 to just over 3,100—and questioned whether the agency has enough personnel to manage its portfolio and meet new mandates.
Heller responded that while the agency was leaner, it could bring on additional staff or contractors if needed. “We are certainly going to be staffed in a way that enables us to deliver our services effectively,” he said.
Rep. Greg Stanton (D-AZ) also criticized the GSA for failing to provide a full view of its real estate holdings, calling current reporting practices “unacceptable” for a system of this scale and cost.
What’s Happened So Far
Despite the delays and resource concerns, the GSA reported measurable progress in 2025:
- Disposed of 90 buildings, cutting 3M SF and generating $182M in proceeds
- Avoided $415M in operating and repair costs
- Saved $730M through lease reductions
- Identified 45 additional assets for disposition, which could trim another 15M SF
Funding Requests And Reorganization
The GSA says further reductions depend on funding and structural clarity. It is requesting $365M more in FY2026 and access to $193M earned through recent property sales.
Meanwhile, a recent internal reorganization at PBS raised questions among lawmakers. The agency has shifted from a region-based to a portfolio-based structure, but members said the new model is confusing and potentially disruptive.
GAO is currently reviewing the reorganization and will release its findings next year. “PBS plays a critical role… It is imperative that this reorganization be a success,” said GAO’s Krause.
Why It Matters
With hybrid work models now the norm across much of the federal government, the need to rightsize office portfolios has become urgent. But downsizing the federal footprint remains a complex, resource-intensive challenge—one lawmakers say needs more transparency, accountability, and funding to succeed.
The coming months will be key in determining whether this real estate reset gains momentum—or continues to stall under bureaucracy and budget constraints.
