Trump Is Considering Selling Most of the Federal Government’s Real Estate

Summary

WSJ What’s News: Trump Is Considering Selling Most of the Federal Government’s Real Estate

Release Date: January 21, 2025

In the latest episode of WSJ What’s News, hosted by Alex Osola, The Wall Street Journal delves into a range of pressing issues impacting the business, political, and cultural landscapes. The episode primarily examines President Donald Trump's contemplation of selling off a significant portion of the federal government’s real estate portfolio. Additionally, it covers the ongoing legal challenges to Trump's executive order on birthright citizenship, substantial investments in artificial intelligence by major tech firms, the repercussions of wildfires in Los Angeles on Hollywood, and the tightening job market for recent MBA graduates.

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1. President Trump’s Plan to Sell Federal Real Estate

Overview: The episode opens with a critical look at President Donald Trump’s recent discussions about selling off two-thirds of the General Services Administration’s (GSA) real estate holdings. This move aims to streamline the federal property portfolio amidst concerns of underutilization and poor management.

Key Insights:

• GSA’s Real Estate Portfolio: Deborah Acosta, a real estate correspondent for The Wall Street Journal, explains that the GSA manages approximately 370 million square feet of federal buildings nationwide, many of which are currently underutilized or vacant. “Many of those have been poorly managed, they say, due to lack of funding, and are sitting empty or underutilized,” Acosta notes (02:59).

• Potential Impact: The proposed sell-off could lead to significant disruptions, especially in Washington, D.C., where a substantial portion of the federal real estate is concentrated. Acosta warns, “If all of these landlords suddenly saw themselves without the GSA as their anchor tenant, that could spell a huge problem for D.C. the real estate market there, and also the local banks in that area that lend to these landlords,” she states (03:38).

• GSA’s Position: The GSA has been proactive in attempting to reduce its portfolio size and claims that increased funding from Congress could further accelerate these efforts. However, the Trump administration’s shift suggests a more aggressive approach to divestment.

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2. Legal Challenge to Ending Birthright Citizenship

Overview: In a significant legal development, attorneys general from over a dozen states have filed a lawsuit aiming to halt President Trump’s executive order to end birthright citizenship.

Key Points:

• The executive order, signed by Trump yesterday, is alleged to violate the 14th Amendment, which guarantees citizenship to all persons born or naturalized in the United States.
• The lawsuit, filed in Massachusetts, seeks a preliminary injunction to prevent the executive order from taking effect, emphasizing the constitutional protections embedded in the amendment.

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3. Major Tech Companies' AI Infrastructure Investments

Overview: The episode highlights a landmark collaboration among three leading technology firms—OpenAI, SoftBank, and Oracle—pledging up to $500 billion over the next four years to build artificial intelligence (AI) infrastructure in the United States.

Details:

• Joint Venture Stargate: The companies have committed $100 billion to their joint venture, Stargate, with the first major project slated for Texas. This investment marks a significant push to bolster the U.S. AI sector amidst global competition.
• Economic Implications: This substantial infusion of capital aims to enhance the nation’s technological capabilities and maintain a competitive edge in the rapidly evolving AI landscape.

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4. Winter Storm Disruptions and Market Reactions

Overview: A severe winter storm has wreaked havoc across Texas, Louisiana, and other Gulf Coast states, leading to widespread transportation issues and economic disturbances.

Impact:

• Transportation Shutdowns: Thousands of flights have been canceled, with Houston Airport suspending operations and local schools closing (04:24).
• Market Response: Despite these disruptions, foreign stocks rose following positive reports from several companies. The Dow Jones Industrial Average increased by approximately 1.2%, the S&P 500 by 0.9%, and the NASDAQ by 0.6%.

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5. Corporate Earnings and Strategic Moves

Netflix:

• Subscriber Growth: Netflix reported 19 million new subscribers in the fourth quarter, marking a 44% year-over-year increase and surpassing revenue projections with $10.25 billion (05:02).
• Price Increases: The streaming giant announced price hikes for its U.S., Canadian, Argentine, and Portuguese plans, with the ad-supported tier rising to $7.99 per month and the premium tier increasing to $24.99.

Goldman Sachs:

• Promotions: Goldman Sachs revealed several promotions within its global banking and markets division, signaling the emergence of a new generation of leadership. Promoted executives will join an expanded management committee, placing them among the firm’s top officials.

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6. Wildfires in Los Angeles Impact Hollywood

Overview: Wildfires in Los Angeles have compounded existing challenges for the Hollywood film industry, which has already struggled due to the pandemic, labor strikes, and industry job relocations.

Insights from Ellen Gammerman:

• Impact on Workers: The wildfires have severely affected blue-collar workers essential to film production, many of whom have lost their homes. “They go pretty much unrecognized. But they really are crucial to keeping the town running,” Gammerman emphasizes (07:02).

• Industry Exodus: The cumulative effect of strikes and wildfires has led to a significant reduction in film and TV production jobs in LA, dropping from 35% to 27% of industry roles by the end of 2023.

• Economic Strain: The depletion of production activities poses a threat to both the local economy and the individuals working within the sector, with many contemplating retirement or career changes due to the instability.

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7. Tightening Job Market for MBA Graduates

Overview: Landing professional roles in the United States has become increasingly challenging, even for graduates from prestigious institutions like Harvard Business School.

Findings by Lindsay Ellis:

• Employment Statistics: 23% of job-seeking Harvard MBA graduates from last spring were still unemployed three months post-graduation, up from 20% the previous year.

• Market Shifts: The job market has grown tougher for white-collar workers as companies prioritize candidates with direct experience. Virtual recruiting and more selective hiring practices have further complicated job searches for recent graduates.

• Economic Trends: These shifts reflect broader economic uncertainties, making it difficult for MBA graduates to leverage their degrees alone in securing desired positions.

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Conclusion and Upcoming Highlights

Alex Osola wraps up the episode by previewing upcoming content, including a special bonus episode focused on earnings reports from major banks and their implications for the economy. The production team, led by Pierre Biennamay, Anthony Bansi, and supervising producer Michael Kosmides, ensures that listeners remain informed on the latest developments shaping the world today.

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This episode of WSJ What’s News provides a comprehensive overview of significant national and global issues, offering listeners in-depth analysis and expert insights into the evolving political, economic, and cultural spheres.

Transcript

[Alex Osola]

This episode is brought to you by Shopify. Forget the frustration of picking commerce platforms when you switch your business to Shopify, the global commerce platform that supercharges your selling. Wherever you sell with Shopify, you'll harness the same intuitive features, trusted apps, and powerful analytics used by the world's leading brands. Sign up today for your $1 per month trial [e-mail] tech. All lowercase. That's shopify.com tech more than a dozen states sue to stop President Trump's executive order to end birthright citizenship plus, the Trump administration considers selling off most of the real estate held by the federal government.

[Deborah Acosta]

A lot of these buildings are sitting almost empty right now in Washington, D.C. and it's a problem that we're seeing.

[Alex Osola]

Nationwide and what the Los Angeles wildfires mean for the workers that make Hollywood Magic. It's Tuesday, January 21st. I'm Alex Osola for the Wall street this is the PM edition of what's the top headlines and business stories that move the world today. President Donald Trump has met with Republican leaders, according to people briefed on the plans. The meeting was intended to focus on how to implement Trump's agenda in Congress. With a narrow majority in Congress, House Speaker Mike Johnson and Senate Majority Leader John Thune have little room for error as they try to push through the president's sweeping plans for the tax code and the border. In a separate event today, three of the world's most prominent tech companies unveiled their AI infrastructure plans at the White House. OpenAI, SoftBank and Oracle promise to pour as much as half a trillion dollars into building artificial intelligence infrastructure in the U.S. it's the latest high profile project timed with the start of the Trump administration. The companies are committing $100 billion to a joint venture called Stargate, with a plan to invest up to $500 billion over the next four years. The first project will be in Texas. Meanwhile, attorneys general from more than a dozen states have filed a lawsuit to stop the end of birthright citizenship after Trump signed an executive order to end it yesterday. The lawsuit, filed in Massachusetts, said the executive order violates the 14th Amendment, which guarantees citizenship to, quote, all persons born or naturalized in the United States and subject to the jurisdiction thereof. The attorneys general are asking for a preliminary injunction to stop the executive order from taking effect. Even the US Government has a landlord. It's a federal agency called the General Services Administration, and it manages hundreds of millions of square feet of the government's real estate across the country. Though the agency initially had a cozy relationship with the President, Trump has soured on the gsa. And now the Trump administration is considering selling off two thirds of the GSA's properties. I'm joined by Deborah Acosta, who covers real estate for the Wall Street Journal. So, Deborah, what does the GSA's real estate portfolio look like?

[Deborah Acosta]

So they manage a massive portfolio of federal buildings, some of which the federal government owns and some of which it leases from private entities, that consists of about 370 million square feet of office space and other types of buildings nationwide. But unfortunately, many of those have been poorly managed, they say, due to lack of funding, and are sitting empty or underutilized. And that has become a big problem, particularly in Washington, D.C. where a lot of this real estate is concentrated.

[Alex Osola]

Okay, so Trump has said that he plans to sell off most of the GSA's property. How big a shakeup would this actually be if it happens?

[Deborah Acosta]

I mean, it would be a pretty big deal. You have a lot of square footage in Washington, D.C. that is actually leased from private entities. And they'd have to decide what to do with the properties. Would they foreclose on these properties? Would then the banks be affected regionally? That would remain to be seen. But, yeah, it would be a big problem because in particular, the GSA has been seen as like this gold standard of an entity that you can lease to because it's leasing to the federal government. And so if all of these landlords suddenly saw themselves without the GSA as their anchor tenant, that could spell a huge problem for D.C. the real estate market there, and also the local banks in that area that lend to these landlords.

[Alex Osola]

What does GSA have to say about this plan?

[Deborah Acosta]

This is something Trump is weighing. This has been discussed within his transition team. The GSA is pointing to how they have already been working to minimize the size of their federal portfolio for the past few years and how they're committed to doing exactly this. And they say that if they got more funding from Congress, then they could accelerate these actions.

[Alex Osola]

That was WSJ reporter Deborah Acosta. Thanks so much for being here, Deborah.

[Deborah Acosta]

Oh, thank you, Alex.

[Alex Osola]

A winter storm hitting Texas, Louisiana, and other Gulf coast states is creating transportation problems. Thousands of flights within or departing from the US Were canceled today, with additional cancellations into Wednesday. Houston Airport suspended operations and schools in the city were closed. Foreign stocks were up today after promising reports about several companies and no immediate announcement from the White House about tariffs. The Dow was up about 1.2%. The S&P 500 rose approximately 0.9%. And the NASDAQ ended the day about 0.6% higher. Reporting fourth quarter earnings after the bell, Netflix said today that it brought in about 19 million new subscribers, a 44% jump from a year earlier. The company reported revenue of $10.25 billion in the quarter, beating its own projection of $10.1 billion. Netflix also announced that it will raise prices on most of its plans in the U.S. canada, Argentina and Portugal. Its ad supported tier will cost $7.99 a month, up from $6.99, while the cost of the premium tier is increasing by $2 to $2499. Goldman Sachs announced today a number of promotions in its global banking and markets division, signaling the rise of a next generation of leadership. The promoted executives will join a revamped and expanded version of the bank's management committee, making them among the bank's highest ranking officials. Coming up, how the wildfires in LA are affecting Hollywood. That's after the break. It's been a tough few years for people in the film industry. In Los Angeles. The industry was hit by the pandemic strikes by actors and writers and the continued migration of industry jobs out of the city. Then came the wildfires. My colleague Pierre Biennamay spoke with Ellen Gammerman, who covers arts and culture for the Wall Street Journal, and asked her how the TV and movie industry in LA has been affected by the fires.

[Ellen Gammerman]

At a very basic level, it's hurt the people who carry these productions on their back, the blue collar people, the gaffers, the riggers, moving big lighting rigs and hauling sound equipment. They go pretty much unrecognized. But they really are crucial to keeping the town running. And they have hundreds of them lost homes. So you're seeing a lot of spreadsheets going around with huge lists of GoFundMes. You know, these lists are 200 names long and their co workers are trying to help them.

[Alex Osola]

And of course, this latest disruption by the fires comes after other challenges for Hollywood, like the writers and actors strikes just over a year ago. How has that affected the industry?

[Ellen Gammerman]

At the start of 2023, before the strikes, 35% of film and TV jobs were located in and around LA. That's according to a recent study, but that figure fell to 27% by the end of that year, 2023. And they're really seeing far fewer production days in LA as the business just migrates elsewhere. I spoke to a lot of writers, editors, others who work sort of in the backstage parts of this show business world. And it's do or die for a number of people at both ends, the very young and the very old, the very young are seeing everyone I know is not working. Why would I enter this business in this kind of role right now? And the older ones are saying, well, things are drying up, I might as well retire.

[Alex Osola]

That was WSJ reporter Ellen Gammerman speaking to my colleague Pierre Biennime. Landing a professional job in the US has become so tough that even Harvard Business school says its MBAs can't rely solely on the university's name to open doors anymore. 23% of job seeking Harvard MBAs who graduated last spring were still looking for work three months after leaving campus, up from 20% the year before, Reporter Lindsay Ellis told our your Money Briefing podcast. What's changed about the job market overall?

[Lindsay Ellis]

It is a tough market for white collar workers and companies are looking for people with direct experience, in many cases making it harder for MBAs who may be trying to pivot into a new field from a degree program to make the case that they would be the exact right fit for an open position. Recruiters also, as recently as 2022, would come to campus early in the school year and would try and hire a ton of MBAs. And now companies are more apt to do virtual recruiting and they are hiring when they have a clearer sense of their business needs, which might be closer to graduation or even after. That all adds up to MBA graduates who came onto the market after leaving campus in 24 that they are having a more difficult time finding work than those even two years prior.

[Alex Osola]

And you can hear more about this story in tomorrow's yous Money Briefing podcast. And that's what's news for this Tuesday afternoon. Before we go, heads up, we're going to have a special bonus episode tomorrow midday in what's News and Earnings. We'll be digging into the latest reports from big banks for signs of what's in store for the economy. That'll be in the what's News feed tomorrow after our usual what's News morning show. Today's show was produced by Pierre Bienname and Anthony Bansi, with supervising producer Michael Kosmides. I'm Alex Zosola for the Wall Street Journal. Thanks for.