First federal building sold under the Trump administration as government shrinks

A private developer has purchased the General Services Administration’s Regional Office Building, marking the first federal building sold under the Trump administration’s downsizing efforts.

Officials announced that Dalian Development will pay $24.26 million for the 940,000-square-foot facility located on more than 3.4 acres at the edge of the District’s Southwest waterfront.

Dalian plans to convert the building into rental apartments and a ground-floor museum, capitalizing on its walkability for national monuments and the L’Enfant Plaza Metro station.

The GSA, the federal government’s chief landlord, said the sale will save taxpayers more than $200 million in deferred maintenance and $5.5 million in annual operating costs for the empty building.

“This move demonstrates GSA’s commitment to President Trump’s agenda to shrink the federal real estate portfolio to a better core that focuses on workspace needs and agency missions,” GSA Administrator Edward C. Forst said in a statement.

Sen. Joni Ernst, Iowa Republican, joined GSA officials at a press conference on Wednesday afternoon to announce the sale. She said it will ultimately save taxpayers more than $700 million, including $500 million in updates that would have been required to maintain the building as a federal office.

“Even though this building has been vacant, the American people have still been footing the bill,” said Ms. Ernst, who has led calls to dispose of underutilized government properties.

Her office noted that the Biden administration’s Office of Management and Budget reported to Congress in August 2024 that underused federal buildings in the District cost taxpayers more than $81 million a year. That included nearly 7,700 vacant buildings and another 2,265 “largely empty” facilities.

Last year, GSA reported that deferred maintenance for federal properties nationwide exceeded $6 billion and was on track to hit $20 billion within five years.

The sale comes as the Trump administration has accelerated efforts to shed underused federal properties as part of a broader push to shrink the government.

The Public Buildings Reform Board, an independent federal watchdog established at the end of the Obama administration to shed underutilized properties, estimated this month that the GSA has received repair allocations equaling just 0.375% of the portfolio’s functional replacement value for decades.

That’s well below the industry standard of 2% to 4%, resulting in what the report called “backlogs that increase building lifecycle costs, accelerate asset deterioration, and degrade facility performance.”

The GSA Regional Office Building is one of 11 federal properties worth $5.4 billion that the reform board listed for accelerated disposal last year, acting on a congressional mandate that allows buildings to reach market faster.

‘Something beautiful for Southwest Washington’

In May, the Trump administration’s Office of Management and Budget approved the board’s recommendation to ax those buildings and empowered GSA to proceed.

Other buildings earmarked for disposal include the Department of Energy’s massive headquarters, where the reform board found just eight employees worked daily as the Biden administration extended telework allowances during the first nine months of 2023. The building has an estimated capacity of 4,388 seats.

The Trump administration’s push to sell federal buildings marks a turnaround from the Biden administration, which declined to adopt the reform board’s recommendations.

In a Wednesday night statement, the reform board applauded the GSA Regional Office Building sale and added that it “looks forward to the sale of additional federal properties it has previously recommended.”

Meanwhile, the U.S. Department of Agriculture announced plans last month to sell its South Building, estimating that it was 70% empty.

That decision was the first to implement a January 2025 law that former President Joseph R. Biden signed. The law requires federal buildings to be at least 60% occupied.

Originally built between 1929 and 1932 as a warehouse, the GSA Regional Office Building was later converted into a federal office. It last housed the Department of Homeland Security and has sat vacant since March 2025.

Public-private partnerships have transformed the Southwest waterfront into a thriving night spot in recent years, which the company said makes it ideal for a mixed-use community.

“This project is an opportunity to create something beautiful for Southwest Washington — something aligned with the city’s larger vision for the neighborhood and a catalyst for its resurgence,” Hossein Fateh, CEO of Dalian Development LLC, said in a statement.