By Peter Grant

The federal General Services Administration said Wednesday it had sold a 940,000-square-foot vacant office building in Washington, D.C. to a housing developer. The deal signals a renewed push to unload federal property and marks a significant step toward revitalizing a long-dormant stretch of the capital.

The buyer, housing developer Dalian Development, is paying a mere $24 million for the building, underscoring the steep decline in office values nationwide -- particularly in Washington.

Dalian is planning to convert the GSA Regional Office Building near L'Enfant Plaza into rental apartments and likely a museum on the ground floor, according to Hossein Fateh, the company's founder and chief executive. "The entire thing needs to be gutted on the inside," he said. "The building is so deep you need to put holes in the middle so the residential units will have windows on both sides."

The sale is part of an expanding push by the GSA, the federal government's landlord, to shed properties in an effort to cut costs, help return vacant buildings to local tax rolls and revive struggling areas in numerous cities. The federal government faces roughly $26 billion in deferred maintenance on its buildings, including $200 million for the building sold to Dalian, according to the GSA.

Early in the second Trump administration, officials stumbled with an initial effort to unload federal properties. Officials abruptly released a list of more than 400 federally owned buildings they aimed to sell. But, in an unexpected reversal, the effort was withdrawn within hours after agencies and lawmakers complained they had been blindsided by what critics called a hasty and disorganized rollout.

The deal for the massive GSA building reflects a more disciplined and collaborative approach by Edward Forst, the Trump appointee who took over the GSA in December.

In testimony earlier this month before a House Transportation subcommittee Forst told lawmakers the agency was "moving strategically and responsibly" and called for "collaborative action" as it worked with agencies, local governments and private industry to reduce its footprint.

Additionally, GSA is under contract to sell the historic Liberty Loan building, a 1918 Treasury Department structure overlooking the Tidal Basin, also in southwest Washington.

The agency, which owns and leases more than 350 million square feet, has been steadily expanding its "accelerated disposition" list, with more than 40 properties for sale. It includes such notable properties as the so-called Ziggurat Building in Laguna Niguel, Calif., a massive, stepped concrete structure visible for miles, and a historic Coast Guard building on Boston Harbor.

The use and value of office buildings across the country -- both in the federal portfolio and the private sector -- have fallen sharply since the pandemic as remote and hybrid work have taken hold. Washington, D.C., has been among the cities pushing to convert obsolete office buildings into housing and other uses to absorb excess supply and revive struggling downtowns.

The GSA's Washington, D.C., deals this year highlight a broader effort to reshape a neglected stretch of southwest Washington, where swaths of federal office buildings sit empty or underused and are now being targeted for redevelopment. The area is "a dead island" but has enormous potential because it is close to the National Mall and a revitalized waterfront area with trendy restaurants and upscale housing, Fateh said.

"You can walk two blocks to the wharf and eat in the evening and two blocks to the north to go jogging on the Mall in the morning," he said.

The building, which is known for its Brutalist architecture, is more than 50 years old and has housed numerous federal agencies over the decades. Fateh said he is preserving the murals in the building.

Fateh estimated it would take about five years to design and build his project. He said plans for a museum are in an early stage, but it might target children.

"After they're done with the Air and Space Museum and Spy Museum they might not mind something else," he said. "Kids don't want to see a sculpture garden."

Write to Peter Grant at peter.grant@wsj.com

(END) Dow Jones Newswires

March 25, 2026 17:28 ET (21:28 GMT)

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