DOGE was Elon Musk’s much-hyped, and arguably chaotic campaign to slash federal spending by ruthlessly cutting fraud, waste, and abuse (as somewhat selectively defined by the Trump administration). Now that Elon has stepped away, DOGE’s mission and resolve remains unchanged; however, DOGE’s bark was much worse than its bite and, despite its toll on the Washington DC market, there is not expected to be much fallout on the US economy. The first-order effect on real estate is blunt: federal agencies, contractors, and not-for-profits will need less space.

At Trump’s inauguration, the Washington, D.C. metro was already facing ~2.4 million square feet of negative net absorption over the trailing 12 months, with office vacancy at 17.1%, about 300 basis points above the national average.

CoStar now projects that as Pre-COVID leases roll off and DOGE measures take hold, D.C. could absorb another 5.5 million square feet of negative net demand, pushing vacancy rates to ~18% through Q2–Q4 2025.¹

The indirect macro effects may be overstated. Despite the high-profile rhetoric, real-time Treasury data compiled by the Hamilton Project show that federal spending has increased ~10% since Trump’s inauguration, largely driven by elevated borrowing costs, contract wind-down delays, and severance liabilities from both voluntary and involuntary reductions.²

While the original DOGE target envisioned $2 trillion in cuts (~33% of federal outlays), subsequent guidance has dialed expectations back to $1 trillion; and most recently, internal administration estimates suggest that net cuts will land closer to $200 billion per year over Trump’s second term, with the largest cuts front-loaded into the first year.³

Official figures from DOGE.gov cite $160 billion in achieved savings ($993.79 per taxpayer) as of May 1, though independent assessments like Pantheon Macroeconomics peg verifiable cuts closer to ~$87 billion.² The true number remains elusive, but DOGE has reportedly begun posting more detailed receipts to substantiate their claims and give clarity to the markets. Even under a $200 billion/year reduction scenario, the macro footprint is modest—just ~0.7% of U.S. GDP; similarly, a federal workforce contraction of ~200,000 jobs (as planned by DOGE) would represent only ~0.15% of U.S. payrolls.² In short, while DOGE will undoubtedly inflict pain on the D.C. MSA, and exacerbate the region’s office glut, it is unlikely to meaningfully move the needle for the broader U.S. economy or national commercial real estate markets.

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^{1 – CoStar, Washington, DC OfficeMarket Report; May 2, 2025}

^{2 – Pantheon Macroeconomics, TheUnited States Economic Monitor.}

^{3 – David Sacks, on theAll-in-Podcast, April 4th, 2025}

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