The administration of President Donald Trump forged ahead this month with plans to shrink the federal government’s national real estate footprint, canceling hundreds of office leases across the country and proposing to sell off many properties.
In the Chicago area, as of this week nearly 200,000 square feet of leased federal office space had been canceled, including space that houses the Midwest regional headquarters for the U.S. Securities and Exchange Commission on West Jackson Boulevard. A federal lease on a building in northwestern suburban Hoffman Estates that stores documents and artifacts from the administration of former President Barack Obama — essentially serving as Obama’s Presidential Library — was also canceled.
And many federally owned buildings in Chicago — including the John C. Kluczynski Federal Building and the 28-story Ralph H. Metcalfe Federal Building — on March 4 appeared on a GSA list of “noncore” properties for sale. The list was pulled the next day and has been undergoing revisions.
Federal workers in the Chicago region say they are on edge, worried that government offices will close permanently, harming their ability to provide needed services.
“We are extremely concerned our region will be shut down and moved to Kansas,” said Nicole Cantello, president of American Federation of Government Employees, Local 704, which represents Chicago-based employees of the U.S. Environmental Protection Agency.
Shutting down the EPA’s Chicago office could mean losing those who monitor local toxic Superfund sites and inspect Indiana’s lakefront steel mills, or take samples from Chicago beaches all summer, helping ensure safety for swimmers.
“How is all that going to be accomplished from Kansas?” Cantello said.
A federal pullback could also shake downtown’s still-wobbly office market, but it’s unclear how the downsizing will unfold.
Cantello, an attorney who before becoming union president filed cases against polluters, worries the EPA’s six-floor Chicago headquarters in the Metcalfe building could be sold or shuttered.
“That would take about 1,000 workers out of downtown Chicago,” she said. “This is a huge office building, so where are they going to put us? It doesn’t make any sense.”
The General Services Administration, which runs the federal real estate portfolio, said it’s working with Elon Musk’s Department of Government Efficiency to analyze all properties, and will soon decide how much space government agencies need.
“GSA is taking swift, common-sense action to solve the nation’s toughest problems of reducing the federal deficit and increasing government efficiency,” according to a statement by GSA.
DOGE began canceling the leases for hundreds of federal offices and facilities in February. The national list grew this month to nearly 800 facilities, totaling more than 10 million square feet and cutting nearly $500 million from the federal budget, according to DOGE.
But Musk’s group scrubbed many lease cancellations from its website last week, including those for dozens of Internal Revenue Service offices nationwide, shrinking the overall list of cancellations to 657 and the amount of spending cuts to about $350 million. It’s another sign of the uncertainty surrounding the efforts of DOGE, which has announced huge spending cuts from government contract terminations, but later admitted the cuts are much smaller. DOGE has also fired federal employees with sensitive positions, only to reverse these decisions, sometimes within days.
One of the leases removed from the list of cancelations last week was for the U.S. Army Corps of Engineers office on South LaSalle Street.
It’s unknown whether the federal offices in Chicago with still canceled leases will shut down entirely or seek other spaces. When asked if the SEC planned to find a new Chicago office, an agency spokesperson said they had no comment.
“It’s really going to depend on how different agencies respond to the administration’s requirement for a new way of operating,” said Marcy Owens Test, a federal government expert with CBRE, a commercial real estate firm. “It may not be public yet, but there might be a plan.”
The initial lease terms for many of the Chicago offices the federal government wants to vacate have already expired, GSA data show. That means the government can quickly exit without paying a penalty, Owens Test said.
The federal government leased about 173 million square feet of space in the U.S., including 2.5 million across Chicago’s metro area, at the end of 2024, according to GSA data. It also owns 19 properties in the city, including the Kluczynski and Metcalfe buildings, and the West Loop’s Harold Washington Social Security Center. Most appeared on the canceled March 4 for-sale list.
An updated GSA list published Monday said eight properties nationwide were set for “accelerated disposition,” including the 15-story William O. Lipinski Federal Building at 844 N. Rush St. on Chicago’s Near North Side, home to the U.S. Railroad Retirement Board. The GSA began seeking a buyer for the property in 2023.
A GSA spokesperson said showing up on the list does not mean a building is immediately for sale, and the government could still sell the properties but allow agencies to continue leasing and occupying the space inside.
“My understanding is that the real estate and lending communities would rather see a more dependable list than have a lot of uncertainty,” said Alissa Adler, an office broker and senior vice president of Colliers, a commercial real estate firm.
More cuts to occupied space seem likely. The Trump administration fired thousands of probationary federal employees, mostly new hires and those recently promoted. And although a federal judge in Maryland reversed the move, ruling the nationwide firings illegal, the administration may return to the court with plans that meet legal requirements.
“They got notices that they were rehired, but immediately put on admin leave,” Cantello said of the EPA employees initially dismissed.
And federal agencies were ordered to produce for the White House by this month new plans to slash workforce costs, which could involve other employees taking early retirement, hiring freezes, layoffs or office shutdowns.
The U.S. Department of Health and Human Services’ Office of General Counsel announced this month it would shutter six of its 10 regional headquarters, including its Chicago location in the Kluczynski building, and consolidate operations into Philadelphia, Atlanta, Denver and Kansas City.
Federal workers say the Midwest region needs locally based staff who understand problems faced by most Rust Belt states, including lead poisoning, or to handle regional emergencies such as the 2023 toxic spill and train derailment in East Palestine, Ohio.
“We were there in East Palestine with boots on the ground within hours,” said an employee of the EPA in Chicago, who requested their name be withheld for fear of retaliation. “And if you drastically reduce the workforce, these sites will get less attention. There are a lot of dedicated people at the EPA who care about the mission, but I’ve never seen morale this low, or people more shaken.”
