Elon Musk’s DOGE Kills Massive IRS Lease in Tennessee

Nashville is home to one of the largest federal leases in the country, slated for termination by billionaire Elon Musk’s Department of Government Efficiency.

DOGE is targeting the 135,000-square-foot lease for the Internal Revenue Service national office in Franklin, the Nashville Business Journal reported. The five-story building was sold for $43.25 million in 2014, setting a record at $319 per square foot.

The owner is a subsidiary of New York REIT Global Net Lease.

The building, at 127 International Drive in Franklin’s Cool Springs area, was built-to-suit for the IRS in 2012 by New York-based Acquest Development. Valued at $4.6 million annually, the lease is expected to save the United States government less than $32 million, according to DOGE’s website.

The lease termination is notable for its size and its implications in markets like Franklin, where large government tenants can drive valuations. Trump is at war with the IRS, which has been the sole tenant in the building.

DOGE, which was created by President Donald Trump through executive order but lacks Congressional approval as an official agency, has focused on slashing vacant or underutilized federal leases across the country. Its “wall of receipts” website claims it has terminated 748 federal leases totaling 9.5 million square feet, including five in Middle Tennessee, as of March 11.

For Franklin and Cool Springs, the IRS lease termination removes one of its largest federal footprints and could reshape the area’s office market as the building seeks a new purpose or tenant.

Nashville’s office vacancy rate was 18 percent in the fourth quarter, lower than the then national rate of 20.4 percent, according to Colliers. The city set the pace for office demand last year, but Franklin’s vacancy rate was 24 percent in 2023, according to CommercialCafe.

— Judah Duke