Under Trump, LA federal buildings at risk of being sold off

Spring Street Courthouse is “for all intents and purposes — f****d.”

—Aleks Trifunovic, president of Lee & Associates in West Los Angeles

It’s not easy to sell off dated, empty federal government properties with niche uses, but the city of Los Angeles might be faced with that task if President Donald Trump and his billionaire sidekick Elon Musk shed office space in the name of reducing government spending.

The Trump administration is reportedly weighing the sale of two-thirds of the government’s office stock to the private sector — part of the administration’s major downsizing, which also includes the requirement for most federal employees to return to their offices and a hiring freeze.

Though the U.S. General Services Administration, which oversees the government’s real estate, had been disposing of real estate, Trump has homed in on the effort.

“GSA is reviewing all options to optimize our footprint and building utilization,” an agency spokesperson said. “GSA is actively working with our tenant agencies to assess their space needs and fully optimize the federal footprint.”

L.A.’s seven federal properties include four downtown L.A. courthouses, though Trump and Musk have said they don’t plan to get rid of courthouses.

Among them are the eight-story, 1.1 million-square-foot 300 North Los Angeles Street, which is on the National Register of Historic Places with tenants like U.S. Citizenship and Immigration Services and the U.S. Department of Housing and Urban Development; and the adjacent 21-story, 763,256-square-foot Edward R. Roybal Federal Building and United States Courthouse at 255 East Temple Street, which is home to the Drug Enforcement Administration, U.S. Marshals Service and Social Security Administration.

There’s also the 17-story Spring Street Courthouse at 312 North Spring Street, spanning 751,791 square feet, per the GSA. Tenants there include U.S. Attorneys, National Labor Relations Board and the Small Business Administration in addition to the courts.

The 10-story, 529,454-square-foot First Street U.S. Courthouse at 350 West 1st Street has 24 courtrooms and 32 judicial chambers.

Even if it were on the chopping block, Spring Street Courthouse would be “tough” to sell, according to Aleks Trifunovic, president of Lee & Associates in West Los Angeles.

“That one is for all intents and purposes — f****d,” Trifunovic said. “They should find a way to keep that one until downtown comes back.”

The highest and best use for the property is office, he said, but no one would want to invest in modernizing it and retrofitting it for $250 per square foot when it would only be worth $150 a foot in the end.

Los Angeles offices were still struggling with vacancy in 2024, with office leasing activity down 23.5 percent from 2019 to 13.7 million square feet, per a Savills report.

Beyond courthouses, L.A.’s federal properties include one parking facility and two office buildings.

A federally owned two-story, 52,774-square-foot parking garage at 1260 South Sepulveda Boulevard in West L.A. would be best converted into a senior-living facility or a traditional multifamily property, according to Trifunovic.

“There’s parks nearby, people can walk into Westwood, and we have demand for multifamily now,” Trifunovic said.

There is the two-story, 45,649-square-foot 1340 West 6th Street downtown, home to the Los Angeles High Intensity Drug Trafficking Area (LA HIDTA), a law enforcement entity.

The 17-story Wilshire Federal Building at 11000 Wilshire Boulevard sits on more than 30 acres of mostly surface parking, according to county records and broker Carl Muhlstein. It is home to the Federal Bureau of Investigation’s Los Angeles field office, Veterans Affairs and the U.S. Passport Agency.

Muhlstein of Muhlstein CRE said the three-building property could easily be “incorporated into a massive mixed-use transit-served project,” with 2,000 or 3,000 residences.

He said those acres “master planned could be worth $500 million to over $1 billion, especially if entitled, with infrastructure, and devoid of political pressure.”

Erected on a former golf course, the historic 511,268-square-foot 11000 Wilshire was designed to house 2,000 employees, he noted.

L.A.’s seven properties represent a small chunk of the 1,796 properties the federal government owns, according to research by The Real Deal.

There are examples of successful sales and conversions of such buildings in the past, though the transactions are complex.

In November, Long Beach-based Hilco Development Services acquired the Chet Holifield Federal Building in Orange County, California, with a $177 million auction bid and plans to replace the structure, CoStar reported.

The Federal Aviation Administration’s longtime West Coast headquarters near Los Angeles International Airport commanded $37.3 million in a 2019 auction that had a starting bid of $8 million.

Worth Real Estate Group and Invesco Real Estate spent $44 million to convert an old post office into offices at 325 North Maple Drive in Beverly Hills. The Beverly Hills Post Office said it got rid of the property because it “was larger than needed for postal operations.” Live Nation leases over 95,000 square feet at the property. In 2021, Worth and Invesco sold the building for $153.2 million.

“The Feds have and can sell property,” Muhlstein said.