Old federal buildings need $50B in repairs. Could some in Atlanta be sold?
It’s not uncommon for property owners to put off pesky repairs and maintenance until absolutely necessary, but a federal commission is sounding the alarm that the condition of government buildings nationwide is at a breaking point.
The Public Buildings Reform Board released a report last week that identified more than $50 billion in deferred maintenance costs and repair liabilities across the federal real estate portfolio — more than double the most recent government estimates.
The report comes as the Trump administration has signaled a willingness to sell parts of the government’s vast portfolio, including briefly publishing a list of more than 400 properties it intended to sell, including the landmark Sam Nunn Atlanta Federal Center, before rescinding that entire list.
The independent and bipartisan board, which was created a decade ago by Congress, said the best solution is to massively reduce how much building space the federal government owns.
The PBRB did not disclose estimates of deferred maintenance for specific buildings, nor whether cities like Atlanta had an outsize backlog of deferred maintenance. But Atlanta has one of the largest clusters of federally owned workspace outside of Washington, D.C., many of which are aging and are concentrated downtown.
“Local leaders have warned that deteriorating or abandoned federal buildings are dragging down struggling downtowns, eroding property values and stifling economic recovery,” PBRB Acting Chairman Talmage Hocker said in a news release.
“The result is a system that cannot meet the nation’s needs, leaving taxpayers to pay the price for historic underfunding of an underperforming real estate portfolio,” he continued.
Nearly a third of all federally owned buildings are between 31 and 75 years old. Buildings within that age range have an estimated $253 per square foot of deferred maintenance on average, which is also among the most expensive to remedy, according to the PBRB’s findings.
Put another way, the largest category of buildings within the federal government’s portfolio also needs the most expensive repairs and renovations. It’s a double whammy that Hocker said can’t simply be fixed with a taxpayer-backed checkbook.
If nothing is done, the maintenance figure is projected to grow by nearly 11 times to $546 billion in a decade.
“Congress is never going to be able to appropriate its way out of this problem,” said Hocker, who also founded a commercial real estate firm in Kentucky. “The only way to handle this is through a radical reduction in the (federal) portfolio size.”
The General Services Administration, which oversees the government’s leased and owned properties, has been chronically underfunded for decades, PBRB said. GSA has been receiving maintenance and repair funds equaling less than 0.4% of its portfolio’s replacement value, while industry standard is typically 2% to 4%, or five to 10 times more.
A GSA spokesperson told The Atlanta Journal-Constitution that “delinquent maintenance is the driving force” behind ongoing efforts to shrink the federal real estate footprint.
Efforts to shed federally owned space have been underway since the first Obama administration, but it accelerated last year under directives from President Donald Trump and the Elon Musk-backed Department of Government Efficiency, or DOGE.
GSA has slashed several leases in the Atlanta area — more than 250,000 square feet as of last summer — but it has yet to sell any of its largest owned assets in the region.
All but one of Atlanta’s six largest federal buildings are more than 48 years old, falling within the age categories more likely to carry hefty maintenance costs. The only young buck among the crowd is the massive Sam Nunn campus near the Five Points MARTA station — a complex that suffered devastating water leaks last year.
Paul Walden, the PBRB’s executive director, told the AJC the report avoided identifying specific buildings to preserve GSA’s options and individual properties’ values going forward.
David Winstead, a PBRB member, added that the government’s buildings could present an enticing value as either acquisition, demolition or renovation targets, given the office market’s uneven recovery from the COVID-19 pandemic.
“It really is a unique opportunity right now because of the nature, unfortunately, of the depressed office market,” Winstead said Thursday during a media briefing.
GSA maintains a list of federal properties for “accelerated disposition,” aiming to sell them for the right price. Since last March, only the 30-story Peachtree Summit Federal Building near the Downtown Connector has made the list, although several other buildings — including the Sam Nunn and Martin Luther King Jr. buildings — were briefly included the month prior before being retracted.
While the Trump administration has expressed willingness to dispose of aging buildings, it also instituted sweeping return-to-office mandates that will require physical workplaces for millions of federal employees.
PBRB said buildings aged 31 to 75 years old are the “most logical candidates for potential divestiture” because of the mounting maintenance costs among the class. The older segment of GSA’s portfolio also consumes a disproportionate share of maintenance resources, PBRB found, adding that those properties divert funds away from “newer properties that should remain cost-effective and fully viable.”
“The enormous amount of property to be divested cannot be addressed all at once,” Hocker said. “A significant investment must be made to ensure that each property is sold at the highest possible return.”
GSA has previously said it might continue to lease space in buildings it sells, depending on the situation. Several real estate experts in Atlanta have expressed doubt that these federal buildings would be competitive on the open market, especially given their conditions and potential repair needs.
“Without a government tenant, the buildings will be worth a whole lot less when they go to sell them,” AJ Robinson, president and CEO of Central Atlanta Progress, downtown’s main civic organization, said last year. “So I’m curious if this is an attempt to just sell the building and stay in as a tenant. Or if they’re going to leave the building, they’re not going to get very much money for them.”
About the Author
Zachary Hansen, a Georgia native, covers economic development and commercial real estate for the AJC. He's been with the newspaper since 2018 and enjoys diving into complex stories that affect people's lives.
