As the Trump administration actively works to streamline federal operations, its ambitious efforts to divest surplus property holdings present new buying opportunities for commercial real estate investors and developers. This guide provides an overview of the purchasing process and some of the challenges these acquisitions present, providing essential insights for navigating this unique market.
Market Context and Policy Developments
Federal buildings have been in the news a lot lately. This past March, the Trump administration published a list of more than 400 federal properties that it has designated for disposition, including more than 100 properties in the DC metropolitan area. Hours later, the administration deleted the list entirely. Despite its chaotic approach to the sale of federal buildings, the administration is staying on the disposition course. In mid-April, the 1.1 million square foot headquarters of the Department of Housing and Urban Development was put up for accelerated disposition.
In an April 15, 2025, executive order (EO), “Restoring Common Sense to Federal Office Space Management,” the administration reversed existing policies that required federal agencies to prioritize central business districts when locating federal facilities in urban areas. The EO’s stated purpose is to relocate federal operations to more cost-effective areas of the country. This new requirement will likely generate additional federal buildings that will be available for disposition, possibly on an accelerated basis.
The Public Buildings Reform Board, a congressionally established entity that is tasked with recommending federal property disposals, has recently released its Second Round Report which proposes the sale of an additional 7 million square feet of federal buildings across a number of states. The Office of Management and Budget has approved the Board’s Second Round Report recommendations. If approved by the Trump Administration, this Board’s recommended dispositions can be fast-tracked, eliminating all of the routinely imposed requirements, and enabling the property to go immediately to sale.
Given this focus on federal property dispositions, if you have ever given thought to purchasing a building from the federal government, this guide will provide you with key insights on how to best proceed.
Identifying Acquisition Opportunities
There are several steps to pursue to find opportunities, submit a successful bid and comply with the relevant requirements. Begin by identifying purchase opportunities, acquainting yourself with the relevant laws and engaging a competent team.
- Monitor the federal government announcements, platforms, and websites, where surplus properties are listed for sale. The General Services Administration (GSA) website offers the general public the chance to bid electronically on federal assets. All registered participants can bid on one or more assets within the specified time frames. Focus on the GSA Auctions website, and specifically the Real Estate for Sale section. The GSA website also has a section that classifies certain real property assets as available for accelerated disposition.
- Sign up for notifications from government real estate websites or platforms such as FedBizOpps (now SAM.gov) for public sales and auctions.
- If using GSA Auctions, create an account on the GSA platform to participate in the bidding process. Complete the registration form with the necessary personal or business details, including contact information and tax identification numbers.
- Keep an eye out for additional listing sites that may be launched. The new administration may be developing new websites, bid procedures, documents and deadlines. Consider setting up a search mechanism that will alert you to new listing locations to track.
Legal and Regulatory Framework
- The Federal Property and Administrative Services Act (FPASA) is the primary legislation governing the disposition of federal property. The FPASA established the GSA, which has the authority to manage, utilize and dispose of federal property.
- The FPASA includes provisions governing the disposition of surplus government property. This can involve transferring property to other agencies, selling it to the public, or donating it to state and local governments or non-profit organizations.
- The GSA has its own set of regulations for property disposal, often detailed in the Federal Management Regulation (FMR) and the Federal Property Management Regulations (FPMR). Both are available on the GSA’s website.
- The Federal Acquisition Regulation (FAR) primarily governs the procurement of goods and services by federal agencies. However, its principles and guidelines influence the contracting aspects of federal property sales. The FAR is available online at the Acquisition.gov website, which provides detailed information on each part of the regulation.
Note that on April 15, 2025, the new administration issued an EO entitled “Restoring Common Sense to Federal Procurement”. This EO’s objective is to overhaul the FAR “to create the most agile, effective and efficient procurement system possible.” The deadline for completing the EO’s required revisions to the FAR is October 12, 2025. Monitor the updated FAR to identify any changes that impact the purchase of federal buildings.
- Determine whether there are any other statutory requirements or restrictions, including those that relate to the parties involved or other specifics of transaction, that you must comply with that are applicable to the property you plan to bid on.
For example, if foreign entity acquirors are involved, the Committee on Foreign Investment in the United States reviews “covered real estate transactions,” which involve the sale or disposition of property that would grant a foreign entity the right to exclude others from physically accessing the property or affords a foreign entity the right to develop the property.
Engage a Qualified Team
Given the complexity of federal property acquisitions, assembling an experienced team is essential. Key professionals include lawyers with government contracting and real estate experience, appraisers, and financial analysts to assist with the due diligence and acquisition process. Also consider engaging a broker with experience in federal government property purchase transactions.
Navigating the Acquisition Process
Develop a general understanding of the federal acquisition process and the timeline involved in transacting with the government. Acquiring office buildings from the federal government involves a structured process that typically encompasses several key stages. This process requires careful attention to detail, adherence to deadlines, and a thorough understanding of the property and market conditions to ensure a successful acquisition.
Prepare in Advance to Bid:
(Timeline: A few weeks to a few months, depending on the complexity of the proposal.)
- Develop clear criteria for the types of properties you wish to acquire based on size, location, budget, and intended use or redevelopment plans.
- After gathering information on properties that are of interest, based on their location, condition, current use and market value, check for any public records or previous sales data that might inform your valuation and interest.
- For each building that is a target acquisition opportunity, review the property listing details, including the Invitation for Bids (IFB) or Request for Proposals (RFP) from the GSA website, which will contain critical information about the property, bidding instructions and process, minimum bid amounts, submission deadlines and other terms.
- Understand the bidding process. Determine whether the auction is a sealed bid, live auction, or an online auction. Carefully review the terms and conditions outlined in the IFB, including bid submission deadlines, and required documentation.
Submit an Offer:
(Timeline: Typically, 30-60 days from release to submission deadline.)
- Respond to the GSA’s solicitation with a formal proposal or bid, adhering to all specified guidelines and deadlines.
- The proposal should include a cover letter, company profile, financial capability statement, project plan and any required forms and certifications.
- Take steps to submit a competitive offer based on thorough market research and financial analysis. Clearly state your bid amount, and ensure it meets or exceeds any specified minimums. Include evidence of financial ability to complete the purchase.
- Prepare any required documents, including proof of financial capability, a bid deposit and any additional forms specified in the IFB. A bid deposit is required (typically a percentage of the bid amount). This deposit can be submitted via certified check, electronic funds transfer or another method specified in the IFB.
- Follow the submission instructions precisely, which may involve electronic submission, mailing of physical documents or participation in an online auction. Be sure to meet the submission deadline to avoid disqualification.
- After submission of the bid, you should receive confirmation that the bid was received. For online submissions, this is usually immediate. If the process involves an ongoing auction, monitor the status to see if you need to adjust your bid.
Negotiate Terms, Finalize the PSA:
(Timeline: 30-90 days, depending on the complexity and number of bids.)
- The GSA will review all submissions for compliance and select the highest responsible bid or enter into negotiations if allowed by the solicitation terms. Be prepared to discuss terms, clarify any aspects of your proposal, and potentially adjust your offer based on GSA feedback.
- If your bid is successful, you will be notified by the GSA or the relevant agency. Unsuccessful bidders typically receive their bid deposits back.
- The transaction will typically involve a Purchase and Sale Agreement (PSA) that will include the terms of sale, including purchase price, contingencies, closing conditions and timelines. Negotiations over the terms of the PSA may ensue if permitted by the terms of the bid instructions or RFP requirements.
- Be prepared to address any counteroffers or additional requirements from the government.
- Review the PSA with legal counsel to ensure all terms are understood and acceptable.
Due Diligence and Closing:
(Timeline: Usually 60-120 days, contingent on the property’s condition and any required remediation.)
- The signed PSA will usually afford the purchaser a due diligence period to conduct physical inspections to assess the condition of the building (and identify necessary repairs or upgrades), perform title reviews and conduct environmental assessments.
- During this period, analyze the building’s financial viability, including potential renovation costs, expected returns, and financing options.
- Assess whether the building has non-government tenants. If there are active leases with non-federal persons/entities, they may be subject to FAR novation requirements before the building may be transferred to the purchaser.
- Address any issues that are identified during due diligence, which may involve negotiating adjustments to the PSA price or other terms (if permitted by the bid requirements).
- Coordinate with the GSA to schedule a closing date and prepare and finalize all closing documents, ensuring that all closing conditions outlined in the PSA are satisfied.
- Complete the closing process and ensure compliance with any post-closing obligations, such as environmental remediation or historical preservation requirements.
Conclusion
The entire federal acquisition process can vary in length but may take anywhere from six months to over a year, depending on the complexity of the transaction and any potential issues that arise. Careful planning, strict compliance with required criteria and procedures, and the guidance of an experienced team are crucial for a successful transaction. By methodically navigating each step, you can maximize your chances of acquiring federal buildings efficiently and securely in this evolving market.