Federal agencies face an April 14 deadline to submit proposals for moving their office spaces out of Washington, D.C., as part of the broader push billed as a move to cut costs and decentralize the federal government.

While D.C.-area landlords and brokers lament the potential loss of major tenants, economic development and CRE professionals elsewhere in the U.S. are energized by the possibilities. But the realities and logistics of moving massive agencies and their employees are complex, and such an operation is unprecedented. 

“This is a new arena in economic development,” said John Boyd, principal at The Boyd Co., a site selection consultancy. “So much of the focus on relocating agencies has to do with creating efficiencies and saving the taxpayer money. It also represents an economic development opportunity for markets throughout the U.S.” 

Bisnow/created with assistance of OpenAI’s DALL-E

Agencies from NASA to Customs and Border Patrol are among those being courted by politicians and others from states across the country. Federal agencies lease roughly 35M SF of office space in D.C.

Ohio Gov. Mike DeWine has made a public push to bring the space agency’s headquarters to Cleveland, Ohio, assembling a bipartisan coalition of state lawmakers to support an effort to locate near the NASA Glenn Research Center. The Cleveland City Council sent a letter directly to Vice President JD Vance and NASA’s temporary administrator making its own appeal.

Aggressive pushes are also being made by Texas, Alabama and Florida, with the Sunshine State’s two senators introducing legislation to move NASA’s headquarters to Cape Canaveral, and local university leaders pushing the Space Coast, the site of the most rocket launches in the country.

But the process seems rushed relative to the realities of the leases in place, according to Diana Parks, executive chair of the National Federal Development Association, an industry group that leases space to government tenants.

“Have you ever packed two hours before you go into the airport?” Parks said. “You inevitably forget something. I think this is going to be one of these things that’s got a lot of issues and problems.” 

NASA itself isn’t in any rush.

“The NASA Headquarters building lease is up in 2028, and the agency is looking at options to lease a new facility in the Washington area,” NASA Press Secretary Bethany Stevens said in a statement to Bisnow. “In compliance with the Executive Order signed Jan. 20, NASA employees returned to full-time on-site work by no later than Friday, Feb. 28.”  

Parks said she believes any moves will take much longer than is currently recognized because the agencies lack the internal expertise to evaluate relocation options. This should be done through the General Services Administration, but the GSA has “already been decimated,” she said. 

Bisnow/Jon Banister

NASA headquarters in Washington, D.C. Many states are jockeying to be the new home of the nation’s space agency.

GSA is figuring out how to cut half its staff, an aggressive culling that has led to the loss of key personnel.

“To me, it seems a little performative,” Parks said. “It’s not going to result in immediate savings or receipts that can go up on the [Department of Government Efficiency] board. And I don’t think you can honestly say how much this is going to cost, because moving federal folks with the IT and the security is not inexpensive.”

Still, excitement over the possibility of relocating agencies and creating new economic development and real estate leasing opportunities has percolated. 

Boyd talked about the potential of, say, moving the National Institutes of Health to the Research Triangle in North Carolina, moving the Department of Transportation to Austin — a center of autonomous driving — or moving the Securities and Exchange Commission to one of the “new Wall Streets” like Dallas or Charlotte.

These are all hypotheticals, but he suggested that this is how local economic development officials are thinking about this opportunity and how congressional representatives, senators and governors are lobbying the federal government. 

@LtGovJimTressel and I sent a letter to President Trump this week to show our support for relocating @NASA‘s headquarters to @NASAglenn in Cleveland. Ohio is the birthplace of aviation, the heart of America’s aerospace industry, and a critical hub for advanced technology,… pic.twitter.com/LhQ8nBQ5FG

— Governor Mike DeWine (@GovMikeDeWine) March 15, 2025

In addition to efforts by DOGE and the Trump administration to move agencies out of D.C., a bipartisan group of lawmakers introduced the Strategic Withdrawal of Agencies for Meaningful Placement Act, or SWAMP Act, in February to decentralize the federal bureaucracy and move agencies out of the D.C. region.

Moving an HQ could create new leasing activity in a new market, including the additional organizations that interact with the agency such as startups and lobbyists. Boyd argues a relocated agency makes that market a center of that sector’s ecosystem and adds a flood of 9-to-5 office workers to a downtown area. Those workers could also be paid at lower rates that reflect cost of living in smaller cities.

“This was a model that [Elon] Musk has successfully utilized at Tesla,” he said. “A lot of workers will simply quit or resign. They’re not going to want to make the move. They’ll be replaced by workers at the lower end of the federal pay scale.”

But the speed at which DOGE and others are moving may not be factoring in the challenges of relocating large government agencies and swapping out real estate. There is a process the GSA has to go through to buy, sell or lease property to increase competition and make sure the government gets a fair price.

Parks said she has a number of government agency clients that are residing in leased space, and when they were told that the lease was canceled, they didn’t have any place to go or money for moving equipment and signing a new lease. 

In these scenarios, called a holdover, property owners can’t evict federal agencies because there’s a clause in the lease that means the agency simply needs to pay more rent. So if an attempt is made to move an agency before they’re ready, and without the proper planning and funding, holdover situations could mean more costs to taxpayers. 

There have been other efforts to relocate federal agencies from D.C. that highlight the challenges and opportunities of such a shift. The Bureau of Land Management was ordered to move to Grand Junction, Colorado, in 2019 during Trump’s first term, only to be relocated back to D.C. after former President Joe Biden took office. The agency ultimately lost 300 workers due to the initial move. A bill in Congress seeks to make the Grand Junction move permanent. 

The Federal Bureau of Investigation has been planning to move its headquarters to Greenbelt, Maryland, since 2023, only to have President Donald Trump vow to cancel the move. 

Parks points to the National Oceanic and Atmospheric Administration HQ’s move to College Park, Maryland, as an example of the kind of synergies and benefits such a relocation can bring. 

The agency has a spacious new headquarters due to cheaper real estate costs outside of the capital, and it can work with surrounding universities to collaborate on research and develop future talent. But that move took years to plan and act on. 

Parks said companies that move their headquarters spend years trying to maximize their savings. Expecting a government agency to do the same on a significantly abbreviated timeline may be wishful thinking, she said.

“It just absolutely underscores how misaligned the appropriateness of making this decision before you even know how many personnel are going to be employed,” she said. “You could say I have concerns.” 

Douglas Development Corp. has acquired the Portrait Building at 701 Eighth St. NW in D.C., which the previous owner turned over to its lender earlier this year.

Jemal’s Portrait Building LLC, a Douglas affiliate, bought the 135,000-square-foot, eight-story property for $34.25 million from lender Oconee Real Estate Holdings VIII – Portrait LLC, an affiliate of Atlanta’s Voya Investment Management LLC, reported the Washington Business Journal. The sale of the property known as the Portrait Building works equates to nearly $254 per square foot.

The Voya affiliate acquired the property in May after former owner Regency Portrait LLC, an affiliate of Clarion Partners, relinquished it via a deed in lieu of foreclosure. Regency acquired the property in 2013 for $98.5 million, with a $59.1 million loan from HSBC Bank USA. The Portrait Building is surrounded by retail, dining, and transportation, and it features on-site parking and a tenant lounge.

Foulger-Pratt has been building apartments and commercial projects for more than half a century, and now the Maryland-based developer is expanding into a new business line: build-to-rent. 

Courtesy of Foulger-Pratt

An aerial rendering of Foulger-Pratt’s build-to-rent community in Brandywine, Maryland.

The firm has been quietly working on establishing a BTR pipeline in the Carolinas and the D.C. suburbs for around two years, and its executives leading the effort told Bisnow Friday that Fougler-Pratt is officially launching the new platform as its first series of projects have closed and are approaching their lease-up periods.  

The five projects total 700 units of for-rent townhouses and single-family homes, and their combined project cost is $250M, Foulger-Pratt Managing Director Joe Clauser said. The projects are all scheduled to begin leasing within the next nine months. 

The developer is partnering with a pair of institutional investors, which Clauser declined to name. He said the firm aims to add around 1,000 more units to its portfolio over the next two years and continue to grow from there. 

“Our ultimate long-term goal here is to have a multibillion-dollar platform in this space,” Clauser said. 

The firm is expanding into the BTR space in part because of how challenging it has become to develop multifamily buildings, with rising interest rates and construction costs making deals difficult to pencil, Foulger-Pratt Vice President Nick Beeson said. 

“This really is a matter of shifting demographics,” Beeson said. “We are very bullish about the demand for this housing solution based on family-forming millennials as well as downsizing boomers, so there’s a lot of demographic tailwinds in this space, but also from a return-on-cost basis, these deals tend to pencil better than a lot of multifamily development right now.”

The move also represents Foulger-Pratt’s expansion into the Carolina markets. The Potomac, Maryland-based developer spent decades building around the D.C. area and has previously expanded to California, Utah and Texas. Its portfolio totals 23 multifamily properties, 15 office properties and 12 retail properties, according to its website. 

Founded in 1963 by Sid Foulger as Foulger & Co., the company today is led by Chairman Bryant Foulger and CEO Cameron Pratt. 

Along with the expansion, Beeson, a North Carolina native, moved from D.C. to Raleigh to lead the execution of the regional expansion while Clauser leads its capital partnerships and strategic direction from Potomac. 

“This is the splash, and it’s a sizable splash,” Beeson said of the expansion. “We’ve been actively pursuing opportunities in North Carolina for two years now. We were disciplined and judicious in what we elected to move forward on down here.”

The firm’s initial wave of BTR projects consists of four under-construction projects it is acquiring from homebuilders as they are completed, three in Charlotte and one in Raleigh, plus one in the D.C. suburb of Brandywine, Maryland, that it is building from the ground up. 

The Brandywine project will be 170 townhouses next to the Brandywine Crossing shopping center and a medical office building that Foulger-Pratt developed. 

The project is a rare example in the D.C. area of a build-to-rent community being constructed from the ground up, a strategy that has boomed in the Sun Belt and other regions. Nationwide BTR development hit an all-time high in 2021 with 6,740 new homes completed, according to RentCafe.

The D.C. metro area didn’t crack the top 20 largest markets for single-family rental homes in the RentCafe report, but it has begun to see some BTR projects moving forward. Another local developer, American Real Estate Partners, expanded into the BTR sector in August with the acquisition of a 200-unit townhouse community that is under construction in McLean, Virginia. 

Clauser said the D.C. area’s high housing prices make it difficult for rental product to compete with new for-sale homes, limiting the growth of the BTR market. 

“It was one of rare sites we’d found in the DMV area where we were able to get the land where we could get zoning for townhomes and deliver a product at a cost basis that worked for a rental product,” he said. 

Courtesy of Foulger-Pratt

One of Foulger-Pratt’s build-to-rent communities in North Carolina

In North Carolina, a market that has seen more BTR development, Foulger-Pratt has four projects: a 172-unit community in the Raleigh suburb of Wendell, a 144-unit project in the Charlotte suburb of Gastonia, a 128-unit community next to the Oak Hills Parkland Reserve in Northwest Charlotte and an 86-unit project near Gaston Country Club in the Charlotte suburbs. 

Those four projects were all initiated by for-sale homebuilders, and Foulger-Pratt reached deals to acquire them as they are completed and operate them as rental properties. The deals allowed Foulger-Pratt to buy homes at a discount to what they’d go for individually on the open market, and it helped the homebuilders reduce their risk in a for-sale market that has faced uncertainty due to rising interest rates over the last year. 

“In late 2022, we wanted to capitalize on the then-softening of the homebuilder market, the home sales market, and we pursued strategic partnerships with homebuilders who had projects underway in some of our target markets, and we found mutually beneficial solutions for them to pivot into the rental execution transaction with us,” Beeson said. 

As it works to grow its pipeline, Foulger-Pratt is looking to do more deals with homebuilders, and it is searching in a range of markets. Clauser said it continues to explore the D.C. area and North Carolina, and it is branching out to other parts of the Southeast, plus the Texas and Salt Lake City markets where it has built multifamily projects. 

“We want this to be a national platform,” Clauser said. “While we have certain target markets where we’ve been more focused, we view this as something that we develop throughout the Southeast where these tend to pencil best in the ‘smile states,’ and that’s where capital momentum is, as well, in higher-growth markets.”

The single-family rental market has faced some criticism as Wall Street giants have scooped up massive portfolios of homes in existing neighborhoods, but Beeson said there is a meaningful difference between that strategy and the BTR strategy of building new communities from the ground up. 

“This is not an asset manager coming in and buying up your grandmother’s neighborhood,” Beeson said. “This is new housing stock. This is bringing more homes to communities that need more residential supply.”

Bisnow/Jon Banister

WashREIT’s office building at 1775 Eye St. NW

The picture of how much commodity office buildings in D.C. are selling for post-pandemic is getting clearer now that the prices Brookfield Asset Management paid for a chunk of WashREIT’s office portfolio have become public.

The D.C.-based REIT announced last week it closed on the 12-building, $766M portfolio sale, which was the culmination of a major restructuring effort, and documents were posted Tuesday in the D.C. Recorder of Deeds showing the individual sale prices for five D.C. office buildings. 

• The office building at 1775 Eye St. NW sold for $80.5M, deed records show. The building, constructed in 1964, is 87% occupied and totals 188K SF, according to WashREIT’s Q2 earnings supplement, meaning the sale came out to $428/SF. 
• The Army-Navy Building at 1627 Eye St. NW sold for $64M, deed records show. According to WashREIT’s Q2 earnings, the building was 97% leased and totals 108K SF, putting the deal at $593/SF. 
• The 1901 Pennsylvania Ave. NW office building sold for $40.3M, deed records show. It was 81% leased as of Q2 and totals 101K SF, putting the deal at $399/SF. 
• The 1140 Connecticut Ave. NW office building sold for $38.8M, deed records show. It was 82% leased as of Q2 and totals 184K SF, putting the sale at $211/SF. 
• The building at 1220 19th St. NW sold for $24.25M, deed records show. Built in 1976, it was 85% occupied as of Q2 and totaled 103K SF, putting the deal at $235/SF. 

The sixth D.C. building sale it announced it was selling to Brookfield, 2000 M St. NW, appears to be owned under a ground-lease structure and the latest sale wasn’t recorded Tuesday. The six other office buildings in the 12-property portfolio were in Northern Virginia, with three in Arlington, two in Alexandria and one in Tysons. 

WashREIT still owns one office building, 600 Watergate, which it said in June it plans to sell separately “when practicable.” WashREIT CEO Paul McDermott said on the firm’s Q2 earnings call last week it expects to hold onto the property at least for the rest of this year, calling it the “best office asset that we had owned,” according to a Motley Fool transcript. 

The REIT also said in June it had signed a letter of intent to sell its eight remaining retail assets, as it shifts to becoming a multifamily-only REIT. WashREIT also said it plans to expand its multifamily portfolio to new Southeast markets including Atlanta, Charlotte and Raleigh-Durham, and it plans to focus on middle-income renters. 

On the earnings call, McDermott said WashREIT sees strong growth drivers in the multifamily sector, a stark contrast to what it was seeing in the office market. 

“In office, we were facing challenging and increasing headwinds, including increase in capital requirements, and we expect those headwinds to continue,” McDermott said. “This contrast in growth prospects boosts our confidence that will create more values for our investors going forward through our portfolio recalibration.”

The company said in June that it aims to transfer the majority of its office personnel to Brookfield, and on the earnings call McDermott said he is grateful to the departing staff and will miss them. 

“I’ll be blunt, it’s been an emotional week here, saying goodbye to colleagues that we’ve had the privilege to work with as we work up to this transformation,” McDermott said, according to the transcript. “But what that has left us with is an outstanding multifamily team to build a platform off of.”