U.S. Treasury Department to Consolidate Two Agency Leases in D.C.
A pair of Treasury agencies will share 65,000 square feet, down from their current combined 196,000 square feet.
By Nick Trombola August 9, 2024 3:24 pm
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The General Services Administration’s downsize of the federal government’s office footprint continues, with the Treasury Department as the latest lucky contestant.
The GSA late last month awarded a lease contract to Duwaliya US Real Estate to house two Treasury agencies — its Office of Management and Office of Technical Assistance — in 65,000 square feet of space at 1575 I Street NW, according to the Business Journal, which cited a source familiar with the deal.
The new consolidation is a hefty cutback in space for the agencies, which will vacate four leases at 1750 Pennsylvania Avenue NW (121,000 square feet) and 1722 I Street NW (75,000 square feet). Their new home is in the 12-story, 288,798-square-foot building at 1575 I Street just two blocks north of the White House. It’s also known as the ASAE Building for its tenant the American Society of Association Executives.
The Treasury agencies’ leases are set to expire in August of next year, according to a 2023 GSA prospectus for the department. Though the existing leases will likely extend into the second half of 2026, per the Business Journal.
In the prospectus, the GSA proposed a downsize to 103,000 square feet for the agencies — nearly double the amount of space they’re set to take at the ASAE Building — a consolidation it justifies as a means to enable a “more robust telework program.”
“Approximately half of the currently housed personnel are moving to increased telework and will not be accommodated under the replacement transaction,” the prospectus says. “A small percentage will go into other existing Treasury spaces. By consolidating the currently separate locations, the proposed lease will increase efficiency, streamline operations, and eliminate redundant space while maintaining mission readiness.”
Duwaliya US Real Estate is an affiliate of Sheikh Khalid Thani A. Al Thani, a Qatari businessman and member of the Qatari royal family, per the Business Journal. His affiliate organization bought the property for $107.9 million in 2015 from Carr Properties, per property records.
The GSA is in the midst of slashing the government’s office space, a trend it started in recent years in order to reconfigure leases and properties it already owns and ditch properties it no longer needs.
D.C. recorded over 537,000 square feet of negative office space absorption this past quarter, with the city now in its fifth straight year of negative quarterly absorption, according to a recent D.C. office market report from CBRE. The GSA’s office cuts are a large part of that downward trend, accounting for nearly half of recent occupancy loss in the District, per CBRE.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
