Federal Lease Terminations Drive 8M SF Of Office Occupancy Losses

U.S. office properties lost more than 8M SF of occupancy in the first quarter, halting the momentum shown in late 2024 when office market absorption went positive for the first time since 2021.

The 8.1M SF of negative net absorption was driven by federal lease terminations, federal contractor sublease additions and buildings removed from the inventory for conversion, according to a JLL report.

Although the Department of Government Efficiency has been inconsistent with its federal lease termination plans, it had terminated 653 leases totaling 7.5M SF throughout the country as of April 15, according to JLL’s DOGE Federal Lease Termination Tracker. That accounts for about 4% of General Services Administration-leased inventory in the U.S.

   ...more

RSK: We shall see how this turns out. Already, some of the terminated leases have been reinstated and more to come I assume. It`s the art of the deal.