The Government Tenant Security Myth
About four or five years ago, I made what I thought was a savvy investment move: purchasing two Social Security Administration buildings. Government tenants are often considered the gold standard in commercial real estate—stable, reliable, and committed to long-term occupancy. The conventional wisdom suggests they rarely move, making them ideal anchor tenants for investors seeking predictable income streams.
My reasoning seemed sound. While I understood these buildings wouldn't be permanent fixtures—technology would eventually render physical Social Security offices obsolete as younger generations would handle everything via smartphones—I calculated a comfortable 10-15 year runway before needing to pivot.
The Friday Night Bombshell
"Friday night at 6:30 this past week, I get an email," I explained to my colleagues. The message was clear and devastating: the Social Security Administration was officially terminating their lease in September 2025—just six months away.
The timing couldn't have been worse. We had just invested over $100,000 in capital improvements, including a brand new roof. Per the lease requirements, we had also recently replaced all the carpeting and repainted the interior—a mandatory refresh required every eight years.
The DOGE Effect
This sudden lease termination appears to be part of a broader efficiency initiative. There are reportedly around 8,400 Government Services Administration buildings nationwide, each staffed with 20-40 employees. Yet during my visits to my properties, I rarely observed more than two or three customers in the building at any given time.
"You've got 20 to 40 people sitting at a desk just sitting there," I noted. "Now, I'm sure there's some paperwork that they can do on the computer, but 90% of them are just sitting there... this is the biggest waste of taxpayer dollars out there."
The political dimension wasn't lost on me either. When I initially purchased these buildings after Biden's election, I felt relatively secure. I had actually considered that if Trump won, these investments might be at risk due to his administration's focus on government downsizing. Now with the recent change in administration, that concern has materialized into reality.
Pivoting the Property Plan
Looking ahead, I have several contingency options. There's a possibility that the blanket termination notice could be rescinded for specific locations. "There's a good chance that they come back and go, 'Okay, we actually need that one,'" I explained.
If the termination proceeds, I'm considering converting the 8,000-10,000 square foot buildings into climate-controlled storage facilities or subdividing the space for multiple tenants.
Lessons Learned
This experience underscores a fundamental truth about commercial real estate: diversification and adaptability are essential. Even seemingly "bulletproof" government tenants can change course quickly, leaving property owners to rapidly recalibrate their investment strategies.
For other real estate investors, my experience offers a cautionary tale about placing too much confidence in the perceived stability of any single tenant type. The commercial landscape is evolving faster than ever, accelerated by technological shifts and changing political priorities.
Getting "DOGE'd" might be painful in the short term, but it's also an opportunity to re-evaluate and strengthen my approach to real estate investment for an increasingly unpredictable future.
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