The federal government is ending 21 office leases in Texas this year, amounting to 97,000 square feet. That puts Texas in 12th place nationally for federal lease cancellations.
Washington, D.C., ranks first with 1.45 million square feet of federal leases canceled.
“Texas, pound-for-pound, is pretty well insulated,” said Tucker White, a researcher at Avison Young. “It’s a lot of smaller leases that are getting canceled.”
Federal offices are managed by the General Services Administration. Some agencies occupy properties owned by the GSA, and so far, those leases are generally staying. The top 10 leases that have been canceled in Texas, amounting to more than 76,000 square feet of office space, were all in privately owned buildings.
The biggest cancellation in Texas so far is a 23,000-square-foot lease for the Office of Natural Resources and Revenue, an agency with two locations in Texas. The agency canceled its lease at 15109 Heathrow Forest Parkway in Houston, a 64,000-square-foot building owned by an LLC with a Laredo address. The agency hasn’t canceled its lease at its other Texas office, 4050 Alpha Road in Farmers Branch, a property owned by the federal government.
The second-biggest lease cancellation in Texas is a 15,000-square-foot office for the Federal Trade Commission, which only has one Texas office, in the Harwood Center, at 1999 Bryan Street in Dallas, a 734,000-square-foot tower owned by New York-based Fortis Property Group.
The third-biggest cancellation is an office for the Equal Employment Opportunity Commission at 106 North Stanton Street in El Paso. It is owned by El Paso Electric Company. The EEOC’s other two offices, 207 South Houston Street in Dallas and 5410 Fredericksburg Road in San Antonio, are in federally owned buildings.
The Department of Government Efficiency previously said 32 leases would be canceled in Texas.
The GSA has also been selling buildings. However, “they’re not selling their best,” White said. Prime office property will likely stay federal for now; many of the buildings being sold are Class B and C properties.
Virginia, Ohio and Maryland have lost the most federal leases by square foot after Washington, D.C. The canceled leases in each of those states hover around 300,000 square feet.
Texas is edged out of the top 10 by Illinois, where the GSA has canceled 130,000 square feet of leases.
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