GSA Proposes the Sale of Hundreds of Government-Owned Properties Throughout the Country

In addition to reducing its leased footprint, as discussed in a previous Holland & Knight alert, the U.S. General Services Administration (GSA) is seeking to dispose of a substantial portion of its owned inventory, including iconic properties such as the Forrestal Building, Agriculture South (Ag South) Building and other high-profile historic buildings in Washington, D.C., and throughout the country, with unfunded capital liabilities totaling in the billions of dollars.

As discussed in this Holland & Knight alert, interested parties should monitor this area closely in the coming weeks. The proposed property list has been taken down. An updated list is expected to be forthcoming soon, as well as an announcement on how the government intends to market and sell these buildings, which may be undertaken with a more expedited process than the typical GSA disposal process. 

GSA Statement on Disposal of Non-Core Assets

On March 4, 2025, the Trump Administration announced its intention to dispose of hundreds of federally owned properties. In a statement posted on GSA's website, GSA identified more than 440 federally owned properties that are "not core to government operations" that GSA intends to dispose of. According to GSA, these non-core assets comprise almost 80 million rentable square feet across the nation and represent more than $8.3 billion in recapitalization needs. GSA states that it "will be engaging in market research and customer agency feedback regarding the potential disposition strategies for non-core assets, and will consider current use, occupancy, cost of agency relocation, and local market conditions when assessing disposition." GSA also notes that it "welcomes creative solutions, including sale-lease backs, ground leases and other forms of public/private partnerships to drive the full optimization of our space while delivering our federal employees the high quality work environments they need to fulfill their missions."

However, at the time of publication of this alert, GSA had subsequently removed the list of the non-core properties it intends to dispose of. Instead, GSA's website now indicates that the non-core property list is "coming soon." More details on the properties and process for marketing and sale are expected to be published in the coming weeks. 

Disposal of Assets Overview

When disposing of federal real estate, GSA's Office of Real Property Disposition must follow a process mandated by federal law and executive orders. As stated on GSA's website and discussed below, there are a number of steps in the disposal process, and not every property goes through every step of the process. The disposal process can take a substantial amount of time.¹

• Federal Transfer. GSA first offers excess property to other federal agencies that may have a program need for it. If another federal agency identifies a need, the property can be transferred to that agency.
• Surplus Property. If there is no further need for the property within the federal government, the property is determined "surplus" and may be made available for other uses through public benefit conveyances (PBC), including homeless use, negotiated sales or public sales based on GSA's determination of the property's highest and best use.
• Homeless Conveyance. If a property is suitable for homeless use, according to the U.S. Department of Housing and Urban Development (HUD), GSA must first consider transferring the property as a homeless conveyance before any other public benefit conveyance can be considered.
• Public Benefit Conveyance (PBC). As a PBC, the property can be substantially discounted in price (up to 100 percent reduction in fair market value) if it is used for a specific public use that qualifies for a PBC through a partner federal agency.
• Negotiated Sale. GSA can negotiate a sale at appraised fair market value with a state or local government if the property will be used for another public purpose.

Public Sale of Property

If state and local governments or other eligible nonprofits do not wish to acquire the property, GSA can dispose of surplus property through a competitive sale to the public. Current and upcoming public sales are posted on the GSA's  

All the information necessary to bid on a particular property is provided by GSA in what is referred to as an Invitation for Bid (IFB) package. The IFB contains the location of the property, property description, maps, pictures, general terms of sale, bidding instructions and any special terms of the sale, including the required deposit to participate in an auction. GSA is required to obtain a fair market value for property sold to the general public.

GSA has three commonly used methods for conducting public sales of surplus federal real property: online auction, public auction and sealed bid.

• Online auctions allow interested buyers to bid for a property online.
• Public auctions are conducted in a conventional "live outcry" auction setting with an auctioneer at a specific date and time. Bidders register, submit the bid deposit and bid openly against each other until the highest bidder is declared.
• For sealed bids, bidders mail in bids and bid deposits to the specified GSA regional office prior to the designated bid opening date and time. All bids are publicly opened on the bid opening date, and the highest bidder is declared after the auction officially closes. Note that GSA does not offer financing; therefore, bids to purchase must be on an all-cash basis.

Takeaways

The Trump Administration's actions continue to signal a clear priority to cutting costs and reducing waste, which may provide an opportunity for investors and developers interested in expanding their real estate portfolio. Holland & Knight's GSA Leasing & Federal Real Estate Team is closely monitoring the situation and can assist interested buyers in navigating the disposal process including potential public sales of surplus properties. In addition, the firm's Real Estate Practice can assist in the acquisition, disposition, financing and recapitalization or development of these properties. For specific questions, please contact the authors.

Notes

¹ Again, it is unclear at this time if GSA intends to stick with this process or create a new or modified process. 

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.